Daniel Podence has signed a new deal at Wolves and joined former club Olympiakos on a season-long loan.

Podence, 27, has played 105 games for Wolves since his £16.6m move from the Greek side in January 2020 but has not featured this season.

The Portugal forward's new contract runs until 2025 with an option for a one-year extension.

"It's no secret that Daniel was keen to look at new options," Wolves sporting director Matt Hobbs said.

"This is an opportunity for him to go back where he was and play European football, and he understood that for us to allow it, he had to sign a contract."

The winger spent two seasons with Olympiacos between 2018 and 2020 and helped the club win the Super League title in 2019-2020.

Hobbs added: "There's still a possibility Daniel comes back and plays for Wolves again, but it was the right time to let him go and play this season.

"He can either come back after the season, or we'll negotiate next summer with a player with a longer contract."

Podence is the ninth player to be loaned out by Wolves this summer, with a further eight having been sold, to bring in some much-needed funds for new boss Gary O'Neil.

Wolves are 15th in the Premier League after picking up three points from their opening four games.