Negotiations were initially concluded at the start of September, with the identity of the cinema chain taking over the site expected to be unveiled at the end of that month.
But frustrated council bosses today revealed that the contract has still not been signed, despite Wolverhampton Council and developers Urban & Civic keen to press on with the project.
The cinema is seen as the most crucial element of the £50 million Westside development, which will take up land running from the Penn Road Island to Salop Street in the city centre.
City council leader Ian Brookfield told the Express & Star that “issues with lawyers” had led to the hold-up.
He said he “pressed home the message” that the final contracts needed to be signed as a matter of urgency at a meeting earlier this week.
“As far as the council is concerned we firmly believe we are in a good place regarding the cinema,” he said.
“We are ready to sign, Urban & Civic are ready to sign, and there is a desire to get it sorted out as soon as possible.
"However, the situation is that for the moment, we don’t know whether this will happen in one week or three weeks.
"We understand that lawyers are a necessary evil. They are part of the process but for the time being, we are all suffering.
He added: "It is very frustrating. We have a real chance of doing something special that the whole city can be proud of.
"It is a huge investment and of course we are absolutely committed to seeing it through."
Construction is due to start on Westside next spring, with work on a new pedestrianised link route through the city expected to start in January.
As well as a cinema, it will also feature mini golf, 10-pin bowling, a multi-storey car park and restaurants.
The scheme has already been put back due to financial issues, and Tories in the city today called for clarity on the situation.
Councillor Wendy Thompson, the city's Conservative opposition leader, said: "Since the council changed the way this scheme was financed, there has always been a need for it to undergo very strict legal checks.
"I get the impression that this has not been done. We need clarity to make sure that the scheme can go ahead on time and to budget. The last thing the public needs is more delays."