Wolves were ripped apart in the opening 45 minutes with Jason Roberts, Brett Emerton and Junior Hoilett netting for Rovers.
But they responded with second-half efforts from Jamie O'Hara and Stephen Hunt and, with Birmingham and Blackpool both losing, they survived for a third successive season of top-flight football.
Mick McCarthy's men finished the season one place and one point above the bottom three, with Rovers three points better off.
The visitors had their survival all but secured with a fantastic first-half display.
They were the first to settle and won an early free-kick but Emerton's cross was easily dealt with by George Elokobi.
Paul Robinson was the first goalkeeper called into action when he held onto a low drive by Stephen Ward after good play by O'Hara.
Hoilett then took advantage of some hesitancy by veteran Wolves defender Jody Craddock but Wayne Hennessey was alert to the situation and dealt with his low centre.
Chris Samba was relieved when his backward header from Hunt's cross flew past his own post, but the Rovers defender did well when blocking an attempt from Ward.
Wolves skipper Karl Henry became the first player to be yellow carded for a foul on Hoilett.
Then after 23 minutes the visitors took the lead through Roberts.
A low centre from Michel Salgado was deflected into the corner of the net by the striker who began his career at Wolves but never played a first-team game.
Wolves midfielder Henry was walking a tightrope after his yellow card and was relieved only to be spoken to by referee Howard Webb after a challenge on Steven Nzonzi.
Wolves were struggling to get their two wingers, Hunt and the returning Matt Jarvis, into the game and were relying too much on the long ball.
And after 39 minutes a superb strike from Emerton doubled Blackburn's lead.
Craddock headed the ball out of the Wolves box but it fell to Emerton who volleyed past Hennessey from 25 yards out.
Hoilett nearly made it 3-0 when his low shot flashed inches past the far post.
But, with seconds remaining of the half, the Canadian did make it 3-0 with a low shot after cutting into the area.
McCarthy made a half-time substitution, with Sylvan Ebanks-Blake replacing Michael Mancienne. That led to Elokobi switching to centre-half, with Ward dropping back to left-back.
Wolves started the second half in positive fashion, and Hunt should have reduced the arrears within a minute of the restart, but the former Hull player headed wide with the goal at his mercy from a Jarvis cross.
Ebanks-Blake then made a good break towards the Blackburn area, but his shot was high and wide of the target.
Robinson then did well to cling onto a deflected low centre from a narrow angle by Jarvis.
But Wolves needed a fine save from Hennessey to prevent Blackburn scoring their fourth goal.
A mistake by Kevin Foley allowed Roberts a free run at goal, but Hennessey went down to his left to save his low drive.
Ward needed treatment after a clash with Salgado, but was able to resume.
Blackburn still looked dangerous on the break, and Samba headed over from an Emerton centre.
Wolves were getting desperate, but they gave themselves a chance after 72 minutes when O'Hara pulled a goal back.
Hunt rolled a short free-kick to the on-loan Tottenham player whose low shot found the corner of the net from 20 yards.
The home side were now on the offensive and Robinson made a fine save to turn over a powerful header from Steven Fletcher.
Then with four minutes remaining, Hunt scored a second goal for the home side to make it 3-2.
He received the ball on the edge of the Rovers area and curled a shot past Robinson into the top corner as Wolves stayed up by the skin of their teeth.