The 47-year-old has been in charge since 2017, guiding Wolves back to the Premier League in his first season at the helm and then enjoying consecutive seventh-placed finishes.
"Nuno has brought us some incredibly special moments at Wolves that will never be forgotten, but every chapter comes to an end," executive chairman Jeff Shi said in a statement.
"His loyalty and dedication over the last four years has been immeasurable, and we cannot thank him enough for the progress he has made for Wolves."
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