كتب : Omar AbdelAziz
Following an extraordinary campaign at Volkswagen Arena, the former Germany international is set to leave for Schalke in the summer.
"We have achieved our sporting targets far more quickly than formulated when I took on the post in summer 2007," Magath said in the club's official website.
"The team is young, still capable of developing and perspectively tied to the club."
Wolfsburg are shockingly on top of the German league with four weeks remaining as they lead holders Bayern Munich by three points.
On the other hand, Schalke are languishing in seventh place, which prompted their board to sack Dutchman Fred Rutten in March.
The seven-time German champions confirmed Magath's appointment a few hours after he announced leaving Wolfsburg.
Schalke are currently managed by trio Mike Buskens, Youri Mulder and Oliver Reck on a temporary basis.