Wolves have been punished for their breach of UEFA Financial Fair Play regulations.
The Premier League club will not receive any ban from European competitions.
But they will only be allowed to register 23 players if they are in the Champions League next term.
The only way Wolves can get into the competition is by winning the Europa League.
They are currently in the quarter finals and face Sevilla, before a potential tie against Manchester United in the semi finals.
Nuno Espirito Santo's side will be two short of the regular 25 man squads teams are allowed.
Wolves had losses greater than 30 million euros over the past year, which is higher than UEFA's "break-even requirement."
The club also has to pay a 200,000 euros fine.