Chancellor Lord Paul of Marylebone has made the donation via a charitable foundation set up in memory of his daughter.
The philanthropic gift is the largest in the university's history and is from the Ambika Paul Foundation.
Lord Paul has been chancellor of the university since 1999.
Bosses are still finalising exactly how to spend the cash.
Lord Paul said: "Remembering our daughter has always been at the heart of the work funded by the Ambika Paul Foundation.
"This gift is dedicated to her memory; but it is also a way of giving something back to the community, and specifically young people.
"A similar donation was made to the London Zoo in 1994, a place Ambika loved to go to.
"The Ambika Paul Foundation has one very specific mission: to enhance the lives of the next generation through education, culture and health.
"I have been associated with the University of Wolverhampton for many years.
"What it stands for, and its quest to provide opportunities for young people, resonates with me and where I have come from, to where I am today.
"Therefore I am very pleased to be able to support the university with this donation as it works tirelessly to create the next generation of leaders and entrepreneurs for this country and beyond."
Lord Paul is also founder and chairman of Caparo, a diversified multinational business focused on delivering engineered and steel solutions to a range of customers from sites throughout Europe, Asia and North America.
The Ambika Paul Foundation was named after his daughter Ambika, who died of leukaemia in 1968 aged four.
It was the treatment purposes of Ambika that brought Lord Paul to Britain in 1966.
Vice-Chancellor of the university, Professor Geoff Layer, paid tribute to Lord Paul for his generous donation.
He said: "The University is hugely grateful to Lord Paul and The Ambika Paul Foundation for what is the single biggest gift we have ever received.
"Lord Paul has been a great ambassador for the university in the UK and around the world for a number of years.
"He is a hugely successful businessman who built his company from next to nothing.
"He is someone our students can look towards in terms of his entrepreneurial spirit and as someone who seized his opportunity.
"We look forward to utilising this gift to make a real difference to our students and help them get the most out of their time with us."