De Bruyne, 22, joined Chelsea from Genk in 2012, but after going out on loan to Werder Bremen in the 2012-13 campaign, he was unable to force his way into the first-team picture this season.
"Kevin De Bruyne has completed a move to Wolfsburg," Chelsea said in a statement. "The Belgian joins the Bundesliga club having made five starts for Chelsea, with a further four appearances as a substitute."
"Kevin always said to us that he wanted to come to Wolfsburg," said Wolfsburg's sporting director Klaus Allofs. "He is convinced as to his sporting perspectives at the club and has the potential to play a major role in the team."
Chelsea did not reveal the transfer fee. They paid around £7m to secure his services and the young Belgian's stock rose in Germany after he scored ten goals in 34 appearances during his loan spell at Bremen.