The Portuguese earned promotion to the Premier League in his first season in charge and followed that up with successive seventh-placed finishes in the top flight.
He also guided the Midlands side to the quarter-finals of the UEFA Europa League last season – its best European run in nearly 50 years – where it was beaten by eventual winner Sevilla.
Amid links with a number of other clubs, Nuno put pen to paper on a new contract last September that still has another two years to run.
However, after an underwhelming 2020-2021 campaign – not helped by a long-term injury sustained by Raul Jimenez in November, plus the sales of Matt Doherty and Diogo Jota – Nuno is to step down by mutual consent.
"Since the first day we arrived at Compton, our ambition was to make a positive change and push this football club forward, and I am proud to say that we did that every single day," Nuno, who departs as the club's fifth-longest serving manager of the post-war era, said.
"We achieved our goals, we did it with passion and we did it together. I want to thank the supporters, who have all played such an important part in helping us reach new heights for Wolves, and the people of the city, who embraced us and made us feel at home.
"I, of course, want to thank all of the staff at Wolves, for their support and total commitment, every single day.
"Most importantly, I want to thank each and every player that we've worked with since the day we started, for their loyalty, their dedication, hard work and talent. They are the ones who have made this amazing journey possible for us.
"Sunday [Monday AEST] will be a very emotional day, but I am so happy that the fans will be back in Molineux and we can share one last special moment together, as one pack."
Wolves can finish no higher than their current 12th-placed standing heading into their last game of the campaign at home to United.
That match will be Nuno's 199th in charge of Wolves in all competitions and will be attended by a limited number of supporters at Molineux as lockdown restrictions are eased in the United Kingdom.
Some 113 of those games have come in the Premier League, with Wolves winning 43, drawing 32 and losing 38 – only eight sides have won more games over that timeframe.
Wolves executive chairman Jeff Shi praised Nuno's influence at the club and is glad the popular coach will get a fitting send-off.
"Nuno has brought us some incredibly special moments at Wolves that will never be forgotten, but every chapter comes to an end," Shi said.
"Sunday [Monday AEST] was already going to be a very special day, welcoming our supporters back for the first time in more than a year; but it will also now be a fitting goodbye for someone who will forever remain an important part of Wolves history."