"Wagner has made a highly-motivated return to the Bundesliga and signed a contract with the Royal Blues until 30 June 2022," the club said on their official website (schalke04.de).
The 47-year old, who played for a myriad of German clubs including Schalke, steered Huddersfield into the Premier League in 2017 and kept them in the top flight in the opening season.
He stepped down in January as Huddersfield's fortunes changed, with the club rooted to the bottom of the table throughout the campaign and were relegated under Wagner's replacement Jan Siewert.
After a brilliant 2017-18 campaign in which Schalke finished second in the Bundesliga, Wagner inherits a team that is languishing near the bottom of the standings. They are 15th in the 18-team Bundesliga having lost 17 of 32 league games contested so far this season.
(Writing by Zoran Milosavljevic; Editing by Pritha Sarkar)
