Activating the quest
After completing the side quest The Man Who Cried Wolf, wait three days and head to any of the hold cities. You will be stopped by a courier with an important message from Falk Firebeard. It turns out that Potema, summoned by the necromancers, wasn't driven off this world completely. You should quickly speak to the chamberlain of Solitude and take care of the phantom once and for all.
New main objective: Speak to Styrr
Head to Solitude and speak with Falk to receive the mission of defeating Potema once and for all. The Wolf Queen wasn't revived completely, so now he hunts Skyrim as a ghost. If she was to regain her material form, you would probably all end up dead.
There's only one person in Solitude who knows enough about necromancy and ancient gods to help you in restraining the phantom. The priest of Arkay, Styrr, is the one you should head to. He can be found at the Hall of the Dead, in the middle of town. Speak to him to learn that Potema has subjected some of the undead in the catacombs of the Temple of the Divines and is preparing to return to the world of living. You need to head to the dungeon and kill the monster.
New main objective: Defeat Potema
Had out of the Hall of the Dead and to the Temple of the Divines. Head inside, turn left and afterwards head underground. Inside the catacombs you will hear the voice of Potema, promising that after dying you will become her servant and companion, ruling the world with her. As you move through the corridors, you have to look out for Draugrs and Vampires inhabiting the dungeon. Inside the room with the first Vampire, take a look around to fight the book Thief which can boost your Pickpocket, lying on the table.
Move onwards, looking out for traps in the floor and the sleeping Draugrs beside the walls. Eventually you should reach a room with a big lever in the middle - pulling it will activate the last revolving door. Behind it you will find lots of useful potions and the passage to Potema's Refuge. Enter the new location and be ready to fight more Draugrs and Vampire and an undead Deathlord (screen below). The last one can cause you some problems because of his strength and resistance, though a couple Shouts and potions will surely let you defeat him. Afterwards find the key in the corpse of his servant and head onwards.
Inside the next room you will come across a large pile of bodies - at some point some of them will return to life and attack you. After dealing with them, head to the main room of the catacombs. The final battle with Potema's followers awaits you here. The ghost of the Wolf Queen will be flying below the ceiling and cast lighting at you, while more undead keep coming out of their coffins. You have to chance in direct combat - the enemies will flood you and their master will easily kill you with lightning.
The best solution is therefore hiding behind one of the pillars and shooting the enemies from a bow. As the undead can be revived only once, the army will eventually exhaust. After you defeat the last of the Draugrs, the powerful Deathlord, the Wolf Queen will evaporate.
New main objective: Retrieve Potema's remains
With the battle in the main room finished, you still need to take care of Potema. Inside the next room you will find a skull with a diadem on the throne - touch it for the ghost of the Wolf Queen to appear. As she is a powerful necromancer, you shouldn't prolong the fight and try to defeat her as fast as possible. Afterwards take the skull and search the nearby chest - you are sure to find some useful items there.
New main objective: Give Potema's remains to Styrr
New main objective: Return to Falk Firebeard
After dealing with the ghost of the necromancer, you can finally leave her sanctum. Head out of the dungeon through the steel door behind the throne and afterward head onwards (look out for two Draugrs beside the walls!). A few steps and stairs later, you should finally return to the surface.
Return to Solitude and go meet with Styr at the Hall of the Dead. Hand him the witch's skull and the old man will bless it with the power of Arkaya, therefore destroying all evil it had inside. Afterwards you can go meet with Falk at The Blue Palace and collect your prize. Apart from gold, you will also receive the title of Protector of Solitude and the very useful Shield of Solitude.