The 29-year-old striker rejected a move to Portsmouth last week but Wanderers boss Colin Lee persuaded him to sign a four-year contract at Molineux - where he will add much-needed firepower to the Black Country club.
"I have been interested in Robert for a while," Lee said. "He is a hard-working striker who will score goals. I am delighted he has signed."
Following Ade Akinbiyi`s departure in the summer, Lee has been on the look-out for a striker and he will hope Taylor`s arrival, together with the signing of Temuri Ketsbaia a fortnight ago, can propel his side to a play-off position this season.
Taylor, who joined City in November from Gillingham and scored five times in 11 starts to help Joe Royle`s side gain promotion, admitted his options at Maine Road appeared limited at Maine Road - following the signings of Paolo Wanchope and George Weah - and said first team football was his motivation to drop a division.
"I knew it was going to be hard to get a game for City this season," Taylor said. "I wanted the opportunity to play regularly in the first team."
This signing may not be the last attacking arrival at Molineux this week with Saudi Arabian striker Sami Al Jaber also expected to be unveiled at the First Division club this week.
