Afobe arrived at Wolves from Arsenal a year ago and scored 23 goals in 48 games for the Championship side.
He becomes the Cherries' second signing of the January transfer window after fellow forward Juan Iturbe signed on loan from Roma.
"It's been a long time coming," Afobe told the club website. "I have come here and I'm not saying I'm the finished article or the best that I'll ever be, because I know that I've got a lot to work on.
Bournemouth boss Eddie Howe said Afobe would "bring strength, power and hopefully goals", and Cherries chief executive Neill Blake said Afobe's "outstanding progress" has been "difficult to miss".
Howe lost striker Callum Wilson and winger Max Gradel to long-term injuries early this season.
Bournemouth's previous record signing was the £8m paid to Ipswich last summer for defender Tyrone Mings - another long-term injury victim.
Wolves turned down offers from Norwich for Afobe in the summer, but the club "reluctantly" accepted a bid from the Cherries on Saturday.
"Benik has regularly re-stated his desire to leave Wolves and to test himself in the top flight at the earliest opportunity," read a Wolves statement.
"Faced with this difficult situation, and with circumstances now changed for Wolves, Wolves were left with little other option than to reluctantly accept the substantial bid."
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