Wolfsburg did not disclose a fee, but the transfer is reported to have cost in the region of £2million.
Hinds, 19, has represented England at Under-16, Under-17 and Under-18 level, but did not make a first-team breakthrough under Arsene Wenger.
Last season Hinds had a spell on loan with League Two Stevenage and failed to score in 12 appearances.
Another star of Arsenal’s youth set-up, Chris Willock, left the club to join Benfica on a five-year deal last week.
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