The 27-year-old has joined for the season and it's understood there's an option to buy.
The former Sunderland man spent part of last season on loan at Hull City and Wolves worked frantically to get the deal over the line. It was finally announced at 11.51pm – 51 minutes after the window technically shut – with the club having to wait to hear if they got the paperwork done in time.
Defensive midfielder is also able to play at centre back. The Senegal international has made two appearances this season for Villarreal. He made 15 appearances as Hull were relegated from the Premier League last season after joining in January.
Known for his ability to break up play, he began his career with Nancy, and has had spells at Bursaspor, Sunderland, Eskisehirspor and Real Betis.
Wolves though failed to bring in a striker despite various last-ditch attempts.
They were left in limbo by PSV Eindhoven pulling the plug on a £10million move for striker Jurgen Locadia.
Wolves had agreed a fee for the 23-year-old Dutchman and looked set to to bring in Locadia before the Dutch club dramatically decided to keep their first-choice striker.
That left a desperate scramble for a back-up option which proved fruitless.
A late loan bid for Middlesbrough midfielder Adam Forshawwas also rejected.
They also missed out on signing Newcastle’s Jack Colback while a bid for Manchester United youngster Scott McTominay was turned down with the Red Devils keen to keep the 20-year-old this season.
The Locadia deal collapsing was the latest frustration for Wolves in their summer-long striker search with a number of targets enquired about and bid for including Nelson Oliveira (Norwich City), Dwight Gayle (Newcastle), Jordan Rhodes (Sheffield Wednesday), Idrissa Sylla (QPR), Jordan Hugill (Preston) and Vincent Aboubakar (Porto).
After Nouha Dicko was sold to Hull City for £3.5m, Leo Bonatini is now their only senior recognised striker.
Polish forward Michal Zyro and youngster Donovan Wilson – who was denied a loan move to League Two side Port Vale owing to Wolves' striker shortage – are the back-up options, while Ivan Cavaleiro and Diogo Jota have also played as central strikers before.
Elsewhere on deadline day, as expected Jordan Graham completed a season-long loan move to Fulham. And young goalkeeper Jack Ruddy moved to League One outfit Oldham Athletic on loan until January.