Wolves manager Paul Lambert worked with Martin at Norwich City, but, according to the report, the Wanderers will have to pay over £7 million in order to secure the services of the Scotland international.
The 28-year-old is a very good striker, and he has proved that he can be a success at the Championship level.
Martin has scored 10 goals and created 27 chances in 27 appearances in the Championship for Fulham so far this season.
Fulham are doing well in the league at the moment, and there is a chance that the Cottagers could end up in the playoffs this campaign.
If the London outfit do get promoted, then Wolves could find it a problem to sign Martin. Fulham could be interested in signing the striker on a permanent basis and the player himself could be keen on playing Premier League football.