The 42-year-old was embroiled in controversy earlier this year after details of offensive text messages between Mackay and Cardiff's former head of recruitment Iain Moody were released into the public domain.
Mackay, who left Cardiff in December last year, admitted the messages were "disrespectful of other cultures" with sexist, racist and anti-semitic comments among the material to be published.
In a statement Wigan chairman Dave Whelan said: "I know that this appointment will draw criticism in some quarters but we go into it with our eyes open and we have nothing to hide on this subject.
"He apologised publicly for what happened at the time and has paid for what he did in terms of the bad publicity he has received since and will no doubt continue to suffer in the future.“Malky made a mistake, he knows that, we know that and we have discussed this issue at length face to face.
"But I believe that it is now time to move on. Contrary to the way he has been portrayed in recent months, the Malky Mackay I met this week, and who has been vouched for by the many different people from whom we have sought advice before making this appointment, is an honourable man.
“He is a committed family man with decent values and is a professional who has worked and thrived for over 20 years in the multi-cultural world of modern football. There is nothing more to say about this subject, and as far as I am concerned we draw a line under it from today.“
Wigan are in the relegation zone after a poor start to the season under former boss Uwe Rosler, who was dismissed last Thursday.“He is the man to lead us back into the Premier League, I am convinced of that having met him and discussed the demands of the job ahead of him," added Whelan.
"He has led a team out of the Championship before and he knows this league inside out having played and managed in it. His achievements at Cardiff City were magnificent and we need a strong leader who will command the respect of a very experienced and talented dressing room, and he is the man to do it.
source: skysport.com
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