The 56-year-old, currently in charge of Al Shabab in the Saudi Pro League, will replace Gary O’Neil who was sacked on Sunday with the club sitting 19th in the Premier League.
Talks between Wolves and Al Shabab over a compensation package have been progressing well, with Pereira expected to bring several members of his coaching staff with him to Molineux, including long-time assistant Luis Miguel.
The pair have worked together at nine clubs in six different countries since 2014.
Pereira’s own managerial career began nearly two decades ago in his native Portugal and he won two league titles with Porto, before going on to win championships with Olympiacos in Greece and Shanghai SIPG in China.
He has also had stints at Al-Ahli, Corinthians and Flamengo before signing a one-year deal to take over at Al Shabab in February this year.
Pereira came close to being named Everton boss in 2022 only for the deal to be called off in the face of a major fan backlash, which saw Frank Lampard appointed instead.
O’Neil and his entire backroom team were dismissed after Wolves fell to a fourth straight Premier League defeat which left them five points adrift of safety.