The city's council passed a resolution put forward by its leader, Councillor Roger Lawrence, which also states the authority will support local people in helping new communities integrate.
The sanctuary status means that it is committed to welcome asylum seekers.
Wolverhampton council joins others, including Birmingham and Coventry, in becoming part of the national movement.
Councillor Lawrence said the city had a great tradition of welcoming people in need from overseas.
He said: "Since the 1940s this city has welcomed people from Poland, from Italy, from Hungary when there was an uprising there.
"Equally Wolverhampton played a major role in accepting people from East Africa when the Asian community there was being persecuted. There are many other communities we could refer to over the years.
"We have done all this because that is the sort of city we are. We are a city that cares and takes care of people in need.
"This resolution is about reinforcing that tradition."
The resolution passed by councillors also includes pledges to promote the positive contribution migrants make to the social, cultural and community life of the city.
The authority has agreed to work with regional and national partners to provide a safe home for unaccompanied asylum seeking children.
Councillor Wendy Thompson, the Conservative opposition leader on the council, agreed Wolverhampton was a welcoming city and 'always has been.'
But she said: "What concerns me is making sure the resources are there to ensure those coming here assimilate properly.
"We want them to have successful lives here.
"Another thing which concerns me is the skewing of gender, as well as age.
"It seems to be almost always males in the 20s and 30s. That concerns me.
"It is important that families come in - particularly with children."
In response, Councillor Lawrence said the issue of 'who' was coming to live in the UK was a matter for national government.
He added: "The important thing is to break away from the rhetoric of deserving and undeserving."