Work has now begun on the £14 million site on Penn Road, close to the ring road St Marks.
The dealership is expected to create around 70 jobs and is planned to open in the first quarter of next year.
Councillor John Reynolds, City of Wolverhampton Council Cabinet Member for City Economy, said: "It is great news for the city centre that the diggers have moved in to start the development of this flagship site.
"This is a major development in this area - regenerating a redundant site which lies in a prominent position on one of our gateways to the city.
"Attracting this type of development shows what an aspirational city we are.
"Jaguar Land Rover is a global leader which chose to build a major production base on the i54 site we developed in collaboration with South Staffordshire Council and Staffordshire County Council.
"Cars that have been part produced in the city could be sold from the Penn Road site in the future."
The new dealership will cover four acres and will include a showroom and a service centre.
- released: Wednesday 7 October, 2015