The 20-year-old has agreed fresh terms until 2022 and now embarks on his second loan spell of 2020, after impressing at Cardiff City last term.
The Wolverhampton-born defender has been at Molineux since the age of eight and rose through the ranks to make his senior debut in last season’s Carabao Cup at Aston Villa.
His development was aided by the stint in South Wales, where he helped the Bluebirds reach the Championship Play-Offs in July.
Now comes a move to the Stadium of Light and Sanderson could make his debut against Swindon Town this weekend.
Everyone at Wolves would like to Wish Dion the best of luck during his time at Sunderland.