Ex Hibs and Scotland star,
Wolves confirmed the deal to be worth a club record £6.5 million for the 23 year old Scotland internationalist. Fletcher scored eight goals in 35 Barclays Premier League games for Burnley last season but it failed to save them from relegation.
Fletcher made his SPL debut with Hibs in 2004 and went on to score 52 goals in 190 appearances for the Edinburgh club and was named the Clydesdale Bank Premier League Young Player of the Season 2008/09.
Wolves manager Mick said: "Steven was our primary target and I’m thrilled to have got him. He’s still very young and had a great first season in the Barclays Premier League. He’s a talented player and has proved it with his goalscoring record, plus he’s a Scottish international."
This move keeps 7 time capped Fletcher in the English Premiership and only helps Scotland as they try and reach a Euro 2012 spot.