Inacio's contract at Sporting runs until 2026 and he has a buyout clause of £39million plus add-ons, but Wolves are set to sign him for a cheaper fee.
A Portugal Under-21 international, Inacio is a product of Sporting's academy. He has won one league title and two Taca da Liga's with Sporting.
Since making his debut in 2020 he has proceeded to make 70 senior appearances for Sporting and has scored seven goals.
Sporting need to sell players this summer in order to finance a rebuild of their squad, and Inacio could be among those to depart.
Other clubs in England and Spain have also expressed interest in the 20-year-old but Wolves are poised to sign him.
Experienced defender Romain Saiss is leaving Wolves on a free transfer this summer, which will create space in the squad for Inacio.
Goalkeeper John Ruddy and defender Marcal are also set to depart Wolves, while the future of midfielder Joao Moutinho is uncertain.
Ruben Neves has also been linked with a move away, with Manchester United linked with the Portugal international.
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