The work has appeared on the back of Waterloo Court building and can be seen on Clarence Road in the Chapel Ash area near the Mander Centre.
It depicts a scene which features a military soldier, painted in black, pointing a rifle and a young girl, painted in white.
Above the scene, the words ‘Magnum Force’ are painted in a way which sees the letters drip down.
The work was spotted by passer-by Iliyan Stefanov, who works at the University of Wolverhampton.
He said: “I live very close to the work and I walk through the area more or less every morning.
“This particular morning I saw it and recognised it looked like Banksy artwork.
“I don’t remember seeing it before so I took some pictures.
“It was a really pleasant surprise, I am not sure if there are more around.
“I do hope it doesn’t disappear, I was thinking of informing the council to see if they want to protect it.”
Councillor Paul Birch, who first noticed that graffiti, said he was unaware of it having been there previously.
He said: “This has all the characteristics of a Banksy, with the police character and the black and white with a splash of colour.
“But realistically, the chances are it’s by a graffiti artist named ‘Skore’ who is a local artist working in the same school and tradition as Banksy.”