The 19-year-old forward has been with his hometown club since 2012 and has successfully graduated from the academy setup.
During 2023-24, Fraser was required to feature in the first-team ranks on a regular basis courtesy of injuries to Hwang Hee-Chan and Matheus Cunha.
A total of 351 minutes were accumulated across 11 appearances, Fraser getting on the scoresheet against Blackpool and Brentford in the EFL Cup and FA Cup respectively.
Fraser has now been rewarded for his progression with a four-year deal, with Wolves holding the option to extend the Republic of Ireland Under-19 international's terms by a further 12 months.
Fraser to go out on loan
While Fraser generally impressed during his outings for Gary O'Neil's side, it became apparent in some games that he could benefit from a season on loan at an EFL club.
Sporting director Matt Hobbs, speaking to the club's official website, admits that is now the plan for the prospect, saying that Fraser's time away from the club will "define" whether he can return and challenge for a spot in the senior side on a regular basis.
Hobbs said: "Nathan's been here a long time, so it's nice for him to be able to continue his journey with us. He's coming to an important stage of his career, where he's really got to kick-start it and define what that career will look like.
"He's a great kid who gets the absolute best out of himself and works his socks off to be the best player he can be. Nathan's attitude is the biggest example he sets for the players coming through.
"His experiences this season were really important for him. Any time you get put in a situation that is a test and allows you to find out a lot about yourself is a really valuable learning curve. You've got to be intelligent and open enough to see it as a learning opportunity.
"The plan this season will be for Nathan to go out on loan. I think it's important now he's had a taste of men's football that he gets as much game time as possible under his belt in the league. It'll be a case of getting him out playing games this year and see how he develops doing that."
Busy day for Wolves?
On a day when Fraser has signed a new deal and some of the club's players are back at their training facilities, Wolves are on the brink of selling their captain.
West Ham United have allegedly agreed a £40m fee for Max Kilman, the defender also said to have agreed personal terms ahead of a reunion with former Wolves boss Julen Lopetegui at the London Stadium.
Wolves will subsequently need to invest that money into finding a replacement, although it is unclear who O'Neil will look to sign at this stage.