The Portuguese winger has been in impressive form for the Championship side since his summer loan move, scoring seven goals and recording five assists so far this season.
According to The Sun, Wolves have been eager to secure Costa's signature on a permanent basis and have parted with £13m to do so.
The Portugal Under-23 international has reportedly been on the radar of Premier League sides Everton, Southampton, Hull City, Sunderland and Crystal Palace.
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