Wolfsburg appointed former RB Leipzig coach Ralph Hasenhüttl on Sunday after sacking Niko Kovac following the Bundesliga side's plummeting form.
The Wolves lost 3-1 at home to Augsburg on Saturday, their 11th league game without a win and third defeat in a row. They were unlucky to have Kevin Wimmer harshly sent off after he had given them the lead but then completely fell apart.
The Volkswagen-backed club, champions in 2009, have slipped to 14th spot with eight games remaining and are only six points above the relegation play-off spot.
Austrian Hasenhüttl, 56, has signed a "long-term" contract according to a club statement and will be introduced at a news conference on Monday. He led Leipzig to second in the Bundesliga and the Champions League in 2017 and was last at Southampton in England.
Wolfsburg also already went out in the last 16 of the German Cup and club bosses decided they had to make a change.
"After the defeat against Augsburg, we came to the decision to end our collaboration after an internal review of the match and our overall situation," managing director Marcel Schäfer said.
"We regret the development and believe it is now necessary to give the team new impetus in order to stabilize the situation."
Kovac's brother Robert, his long-time assistant, has also moved on.
Former Croatia, Eintracht Frankfurt, Bayern Munich and Monaco coach Kovac was appointed at Wolfsburg in 2022. They missed out on a Europa League spot last season and though this campaign started well, the Wolves have since gone 20 league games with just two wins.
"Of course, as head coach, I am particularly disappointed that we have not managed to turn things around despite promising beginnings," the 52-year-old German-born Croatian said.
"We wish the team, the entire club and its fans the very best for the rest of the season and for the future."
Hasenhüttl, who also coached Ingolstadt in the Bundesliga, will take training on Tuesday and has time to run the rule over his players given they do not play again until March 30 due to the international break.
Former Mainz coach Bo Svensson and Matthias Jaissle of Al-Ahli had also been in the running, media reports said.
