A dramatic last-minute deal was pushed through after the Cherries caved to Wolves' demands.
Wolves will pay Afobe's wages in full and the deal includes an option – but not an obligation – to buy Afobe in the summer.
It's understood the loan fee is £1million.
The Express & Star understands the deal was revived at 10.30pm, just 30 minutes before the 11pm deadline.
Wolves had believed the move to be dead in the water having had no contact with the Cherries since 1pm on Wednesday afternoon.
A stalemate had ensued for the past 48 hours with Wolves unwilling to either buy Afobe permanently now or agreeing to a permanent deal at the end of the loan spell in the summer.
But just minutes before last night’s deadline Bournemouth agreed to do the deal.
Afobe left Wolves in January 2016 for £10million but had fallen down the pecking order at Bournemouth, making only five Premier League starts this season.
The striker enjoyed a stellar 12 months in Wolves colours after signing from Arsenal for £2m, scoring 23 goals.