The English club said Van Damme, who joined Wolves from Anderlecht as their first close season signing in June, was in Belgium for a medical and was set to sign a three and a half year contract.
"We have agreed a deal for the transfer of Jelle Van Damme to Standard Liege subject to the paperwork being completed over the next 48 hours," said Wolves chief executive Jez Moxey.
"Once the deal goes through Jelle will leave us with immediate effect, but will not be able to play for Standard Liege until the transfer window re-opens on Jan. 1 and international clearance is granted."
Moxey said relegation-threatened Wolves would receive the entire fee for the player "in the same way as we paid it".
Van Damme made just six Premier League appearances for Wolves, scoring once in a defeat to Fulham in September. The club are 19th in the 20-team league, ahead of bottom placed West Ham United on goal difference.
