Fraser has been with the club since the age of seven and stepped into the first-team last season, playing nine times across the campaign.
Zulte Waregem are a second division side which will allow the attacker plenty of time on the pitch to develop and expand his ability.
Head of professional football development Matt Jackson spoke about what an opportunity it is for the youngster.
“It’s great for Nathan that he's going to expand his horizons. We're really proud he’s going out there to challenge himself. It’s a big club in Belgium, fighting to get promotion again. He’s challenging himself in a football sense as well as a life sense, it is such a positive for us here at Wolves and we wish him the very best of luck.
“We assessed all of the options for the players, as we always do, looking at the way he's going to fit into the playing style out of there, the way that the team plays. He's visited so he knows the town, he’s seen the stadium and he's met the staff.
“They’ll want to get back to that top tier and Nathan can play a big part in that, while improving his own game. We’ve tasked him to continue to improve physically, because he's had that taste of first-team football and knows what it's about. He knows what he has to improve on to come back and get in the team regularly.
“We almost had to throw him out of the training ground through the summer because he worked so hard, and he's so professional. It's brilliant now that he's been patient enough to come up with this perfect opportunity and can just go and unleash himself.”
Minutes on the pitch are the priority for Fraser who turns 20 next year as he looks to break into the first team once again.