Sheffield United had tried to re-sign their former player from Wolverhampton Wanderers.
Wolverhampton Wanderers have been quite busy in the summer transfer window so far.
Cathro has worked with Wolverhampton Wanderers boss Nuno Espirito Santo before.
Like Willy Boly, Atletico Madrid's Diogo Jota had his doubts about moving to Wolverhampton Wanderers this summer.
Goncalves would be Wolverhampton Wanderers' ninth summer recruit.
Wolverhampton Wanderers are putting clubs like West Ham United to shame with their summer spending.
Wolverhampton Wanderers have signed four players this summer, three of whom can play at centre-back.
FC Porto turned Willy Boly away as he arrived for training but Wolves coach Nuno Espirito Santo has offered to rescue him from the nightmare.
The former Benfica man had an excellent campaign with Wolves last season, and gained a host of admirers from higher leagues.
The Portuguese striker scored 13 goals for Aves last season.