Camacho spent six-and-a-half seasons with Malaga, who he joined from Atletico Madrid, his only other professional club.
“The Bundesliga enjoys a very high standing in Spain and VfL have been well known in the country since the Champions League home win over Real Madrid,” Camacho told Wolfsburg’s website after his deal went through on Saturday.
“I am really keyed-up about German football. The German mentality and the way football is played is something I have always liked, because there is a great focus on tactics and order, paired with attacking football.”
The 27-year-old’s arrival comes after Luiz Gustavo, who fills a similar role, was sold to Marseille.
Reports in Spain suggest Camacho’s transfer is worth €15m and he will be presented on Tuesday.
A busy off-season for Wolfsburg has also seen the likes of Ricardo Rodriguez, Luiz Gustavo, Jannes Horn and Diego Benaglio leave, while signings have included John Brooks, Landry Dimata and William.
Wolfsburg, who only avoided dropping out of the Bundesliga last season in the relegation play-off, also signed teenage forward Kaylen Hinds from Arsenal earlier on Saturday.