The 20-year-old has played 25 times in two seasons - since arriving at Wolves for £9 million from Liverpool.
However, he as failed to tie down a first team spot and was criticised by manager Bruno Lage last season for failing to prepare correctly ahead of a game - with Hoever being substituted.
He has been linked with a move away - and early this month the Express & Star reported Wolves would allow him to leave for the right price.
However, it emerged Hoever was close to heading back to his home nation with PSV - and Wolves have now confirmed the deal.
Wolves' player marketing manager Matt Jackson believes playing in the Champions League with PSV will benefit the youngster.
He said: “You can’t have young players not playing regular football for too long and he’s too much of a talent not to be playing every week. He’s gone to a magnificent football club, who play in Europe, so we’re delighted with how that’s going to progress him and hopefully he’ll help PSV be competitive, chasing Ajax down at the top.
“Playing in the Champions League would be brilliant for him. We had Nigel Lonwijk out there, so I saw a lot of the league last year and really liked the culture. It’s a great place to live and is Ki-Jana’s home country.
“There’s big club pressure which we like to challenge the lads with and he’ll experience that. He could have played in England, we had offers, but with the stature of club and competitions they’re in, it can provide fantastic experiences.
“As professional footballers, you want to play every week. It’s the game you love and it’s hard to be a squad player – not playing regular football is frustrating. We want players to have the opportunity to progress and show they’re good enough to play every week in the Premier League, and Ki-Jana has that ability.”