The 25-year-old will join on Saturday, 1st July as a free agent after the contract with his current club, Eintracht Braunschweig, expires at the end of June.
The German-born Ghanaian defender has spent his entire domestic playing career in Germany, beginning at SV Wilhelmshaven before enjoying spells at FC Rot-Weiß Erfurt, MSV Duisburg 33 and VfR Aalen.
Ofosu-Ayeh joined Eintracht Braunschweig in May 2015 where he went on to make 40 appearances during his time in Lower Saxony.
Discussing the full-back Sporting Director Kevin Thelwell said: "We've spent a lot of time looking at players abroad and 2. Bundesliga is a very strong league.
"Eintracht Braunschweig were just unfortunate to not get through the play-offs and be promoted to the Bundesliga.
"He's a player that we've watched for some time and we think that he'll bring with him a lot of experience and a lot of quality in the right back position.
"The quality and the size of the German leagues is huge, the size of the fanbases at all of the clubs there are pretty outstanding and it's an enviroment that's as close to England as you can imagine.
"I've got no worries that he will be able to come in here and hit the ground running."
Speaking ahead of his Molineux move, the defender revealed his excitment at the prospect of playing in England.
"For me it was always a dream to play in England," explained Ofosu-Ayeh before adding: "And now I’ve seen everything here, I know that it’s a very big club and a traditional club. I’m very happy that I have the chance to play here.
“I’m very excited about everything - the club, the fans and my team mates so I’m ready for my journey here."
