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Hecking, who is leaving Nurnberg to move to the Volkswagen Arena, takes over from Lorenz-Gunther Kostner who has been caretaker-coach of Wolfsburg since Felix Magath's resignation at the end of October.
A statement on www.vfl-wolfsburg.de today read: "The new head coach of Wolfsburg is Dieter Hecking. Wolfsburg and the 48-year-old have today agreed a deal until 2016.
"The date for the official presentation of the new Wolves coach will be announced in the coming days."
Wolfsburg are 15th in the Bundesliga standings on 19 points, seven above the bottom three and one behind 14th-placed Nurnberg.
Hecking took charge of Nurnberg in 2009 and helped them avoid relegation in his first season before finishing sixth and 10th respectively over the last two campaigns.
Nurnberg said on their website that they hoped to make a decision on Hecking's successor in the coming days.
(reopens) "I am really looking forward to this new challenge," Hecking told Sport1 television.
Wolfsburg turned to Hecking after negotiations with Bernd Schuster stalled, although the 48-year-old was always a leading candidate for the position.
Nurnberg's director of sport Martin Bader, who was informed of the negotiations by both Hecking and his Wolfsburg counterpart Klaus Allofs yesterday, had hoped to retain the services of his coach.
"I had made it clear to him that it was my biggest wish, if at all possible for him to stay at least until the end of the season, if not longer," said Bader
"I am disappointed that we were unable to keep hold of him at least until the end of the season."