The Azerbaijan international, 20, has agreed a four-year contract at Molineux.
Dadashov made 22 appearances for Estoril last season, scoring four goals.
"Renat is an exciting prospect," Wolves sporting director Kevin Thelwell said.
"When working in the transfer window, we are not only focused on the present, but also the future, and in Renat, I'm very hopeful we have secured a signing who will develop into a fantastic footballer in the future."
More about: football