It looks like the way this will work is that if you were to go into the Wi-Fi settings to turn off your Wi-Fi connection Windows Phone 8.1 will offer a new option to set a timer to automatically turn Wi-Fi back on. The feature is being labeled as "Wi-Fi Sense" and although it is based on a timer, it will require that Location services be turned on. You'll be able to choose to have Wi-Fi automatically turn back on in 1 hour, 4 hours, 1 day, or set it to manual controls.
This sounds like a very nice feature for when you're leaving home for a short time. The settings notably don't offer anything in the 8-10 hour range, which would target a work day cycle, but there have been rumors that Windows Phone and Cortana will handle that situation with context specific settings changes based on being at home or work.