Wednesday announced that the deal still needs Football League ratification - but Mammadov will become involved in the running of the club while they wait for the green light.
Mammadov, founder and chairman of Azerbaijan-based Baghlan Group - which specializes in oil, gas, construction and transportation - also owns Azerbaijan side FC Baku and French Ligue One club Lens.
"I am immensely pleased and proud to have agreed a deal to buy this wonderful club," he told the club's official website.
"I am a passionate football fan with enormous respect for English football. I have been looking at investing in England for some time but I was determined to find the right club.
"I am hugely ambitious and feel the Owls match my passion and desire for success and represent our motto of Azerbaijan Land of Fire. I promise the supporters I will work extremely hard to bring the success everyone so rightly
Former Portsmouth owner Mandaric said: "I am delighted to have concluded a deal with Hafiz.
"He is a true football man and I have no doubt whatsoever that I am handing over control to someone with a real passion for the game and the ability to carry on the work I started three years ago to return Sheffield Wednesday back to the top division of English football."
Mandaric bought Wednesday for £1 in December 2010 after agreeing to take on reported debts of over £20m.