Molineux's redevelopment into a 40,000-seater stadium took a leap forward today as Wolves were given a 999-year lease on the ground.
The club had asked Wolverhampton City Council for the freehold of the land to progress plans to expand the existing 29,300 capacity, with a hotel and conference centre among the options.
The council did not want to grant the freehold in order to ensure there must always be a football pitch at Molineux.
Details have yet to emerge on Wolves' expansion plans.
But today council leader Neville Patten revealed the club was planning to invest £40 million in improving the stadium and surrounding area, with early proposals including a hotel and conference rooms.
He said club chief executive Jez Moxey had told him of the proposals at a meeting yesterday.
"Jez has praised Wolverhampton and said Wolves are looking to spend £40m. I understand they're in talks with the University over buying some land at the back of Molineux as well."
Wolves owner Steve Morgan bought Peal House, the former Carillion building on the corner of Waterloo Road, in January.
The city council last night agreed to extend the lease to 999 years from 125 years.
Councillor Patten added: "This means any developers who may want to put money in know that their investment will last.
"It also prevents the stadium from being moved out of the city centre."