Edwards was third choice in his position at Villa Park behind fellow Welshman Mark Delaney and Ecuadorian Ulises De la Cruz.
The 6-cap international has signed a three year deal at Molineux as they prepare for life in the Championship after being relegated from the Premiership.
Wolves will pay £150,000 up front for the 21-year-old with the possibility of the deal rising to £225,000.
An initial medical had shown a right ankle problem but Edwards has now been given the all clear.
Wolves boss Dave Jones said: "I'm pleased to get him, especially after the medicals he has had to pass."
View a Printer Friendly version of this Story.