Graham, who recently turned 25, has not played for the Wolves for more than two years and joined League One club Gillingham on loan in the January transfer window.
He first joined Wolves on loan from Aston Villa in 2014 before the move became permanent the following year.
Graham became a regular at Molineux under Kenny Jackett before a serious knee injury stopped his progression. He leaves the club after making a total of 17 appearances.
The forgotten man Phil Ofosu-Ayeh also left Molineux. The defender was one of the first recruits after Nuno Espirito Santo was named head coach in 2017, but he never appeared for the club’s first team.
In addition to Graham and Ofosu-Ayeh, the Wolves have released five members of their development organization to Connor Johnson, Callum Thompson, Ming-yang Yang, Jeb Abbey and Todd Parker.
President Jeff Shi said, “To the players who are leaving us at this point, I want to express my thanks for all their efforts while representing the wolves.
“We wish them the best of luck in the future, I hope they can all be successful in the game.”
Wolves have chosen to extend goalkeeper John Ruddy’s contract for an additional year.