The 24-year-old forward has signed a contract through to 2021 as the Wolves attempt to replace the creative output of former attacking midfielder Julian Draxler.
Ntep becomes the fourth attacking player signed by Wolfsburg since Draxler's £32million move to Paris Saint-Germain was announced.
Yunus Malli was snapped up from Mainz last week while Riechedly Bazoer and Victor Osimhen had previously been brought in from Ajax and Ultimate Strikers Academy respectively.
Wolfsburg coach Valerien Ismael was delighted to see the addition of the Cameroon-born forward, who scored 18 goals in 74 Ligue 1 matches for Rennes.
"With Paul-Georges we have managed to greatly improve our quality on the wings," he said. "He is lightning quick, very skilled and has a lot of experience despite his young age."