The Royals will make an initial payment of £1millon with Wolves receiving a further £500,000 based on appearances.
There is also a sell-on clause included in the deal.
"We have agreed a fee but the deal will of course be subject to a medical," said Wolves chief executive Jez Moxey.
"Seol is a good person and a good player but he never made the impact on the pitch that we were hoping when we signed him from Anderlecht.
"He has publicly and privately expressed his wish to leave Wolves to play in the Premiership.
"We had two offers from Premiership clubs and some interest from Germany as well, but it was Reading who offered a deal that both the player and Wolves found acceptable.
"We wish him well."