Before joining Leipzig, Hwang who was part of a very strong Salzburg team, scored 16 goals including 22 assists during the 2019-20 season.
Reports are that Wolves have the option to buy Hwang for around £13 million next summer.
After finalising the 25-year-old's switch to the Premier League, Wolves new boss, Bruno Lage said;
"He's got a good pedigree, having played Champions League football and at a World Cup," said Wolves technical director Scott Sellars.
"He's got a lot of pace, power and strength. He's probably a little bit different to what we've got, and we think he's a strong acquisition for the squad.
"Ultimately, we felt it was an area where competition is important, so when somebody becomes available on loan, with his quality and experience, and he has a desire to come, it becomes an exciting opportunity. We're certain he's going to add quality to the group."
In 29 Bundesliga appearances for Leipzig, the pacey winger found the net three times.
Hwang will join fellow countryman Son Heung-min, in the Premier League.
He is a key part of the Korean national team, with 37 caps and six goals to his name.
Hwang with his qualities is expected to improve a Wolves squad that are yet to score so far this season.
Wolves are yet to pick up a point in the Premier League after losing all their first three games to Leicester City, Tottenham Hotspur and Manchester United.
