The 20-year-old spent the first half of the campaign on loan at Belgian side Anderlecht, but the clubs have come to an agreement to allow the £35million signing to now join the Dutch club.
PSV will pay Silva's full wages during his loan, while they also had to agree a compensation package with Anderlecht as Wolves had no recall clause on his season-long loan that was agreed in the summer.
Sporting director Matt Hobbs said: “Anderlecht have been brilliant with Fabio and have given him a platform to perform, but I think they’d admit it’s been a season where they’ve struggled.
"We were concerned if they don’t progress in certain competitions, they won’t have many fixtures with how their system works, and having an international tournament in the summer, it was important Fabio plays regularly.
“Anderlecht have been great understanding that. They’ve been first rate and we’d have no issue loaning players to them again.
"Now, this is the next step of his development. The club invested in a young player with high potential, and he showed glimpses of his talent here at Wolves, and at Anderlecht we saw him score regularly, so we’re looking for the same at PSV.
“Julen wants him to be back here for pre-season to see how he’s developed. The manager is keeping a close eye on him.”
Meanwhile, Ki-Jana Hoever has returned to Wolves after a difficult loan spell at PSV.
The two clubs agreed to terminate the season-long loan, and as an incentive for Wolves to agree to the Silva deal, PSV will pay a fee to Wolves that will cover Hoever's wages until the end of the season.
Wolves are now actively looking for a new loan move for Hoever.
Hobbs added: “PSV being interested in Fabio has given us the opportunity to pull Ki out. We’ve been able to bring Ki back while they contribute to his wages for the rest of the season and we can pick a new club for him for the second part of the season, based purely on a football reason.
“We can pick the best club who are going to give him good minutes and the right style of football, without any other thoughts needing to come into play.”