Tower Controller reported aircraft being held by TRACON to avoid VFR traffic conflict resulting with the aircraft descending rapidly and being issued a low altitude alert. The aircraft landed safety at the airport.

Narrative

Aircraft X was on an RNAV approach to RWY16L. There was a VFR aircraft just north of AFW's class D airspace transitioning to the east. This aircraft indicated 022 but was not talking to air traffic and had no ADS-B. Local control tried to issue traffic in the blind with no response. The targets merged over WIGZU; the FAF for RWY16L. D10 had to hold onto Aircraft X until they were past the traffic so that Aircraft X did not descend into the VFR traffic; this led to a late communication switch and added workload for both the Local controller and the approach controller. Aircraft X also had to descend rapidly which activated the Low altitude alert. The Local controller did issue the low altitude alert and Aircraft X landed without incident.The area near WIGZU continues to be a dangerous area with multiple aircraft crossing this area daily without contacting AFW or D10. The AFW class D should be extended to include WIGZU so that we can talk to and issue traffic advisories to these aircraft.