Wolves technical director Scott Sellars says a loan spell at Birmingham City is perfect for Matija Sarkic.
The 23-year-old has spent time at Livingston and Shrewsbury Town, and will now step up to the Championship level.
Sellars told the club's website: "If you look at Matija's progression over the last few years, even before he was with us, he had a season in Scotland with Livingston, then he had a good season last year at Shrewsbury, and now he's going to test himself in the Championship.
"With all our players, we're always looking for them to progress and face new challenges, and the best way to do this is play higher up the leagues.
"It will be a step up from League One to the Championship, but it's going to be a fantastic opportunity for him to play in a really competitive league – one of the top leagues in Europe.
"It's also a great stepping stone for the Premier League and will give him all the elements he needs to progress his career."
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