Wolfsburg announced Wednesday the 55-year-old will leave them when the season ends on May 23. Hours later Schalke confirmed Magath will take on the dual role of team manager and coach for them next season.
Neither the lure of taking Wolfsburg into the Champions League for the first time, nor leading them to their first Bundesliga title - imminent with his side's three points clear with four games remaining - could tempt Magath to stay.
Amid rampid speculation in the German media last week, Magath admitted it was a poor time to make his future plans known with his current side chasing the league title.
"I am glad that the decision is finally out, even if I am not really happy about the circumstances," said Magath in a press conference in Wolfsburg on Wednesday having taken charge of the Bundesliga team in the summer of 2007.
"After discussions with Wolfsburg's supervisory board, we had already decided a week ago I would leave, but I regret the timing."
Magath told the Wolfsburg squad the news on Wednesday morning and says he leaves with his head held high.
"I believe there are good reasons behind my decision," he said.
"From my point of view, the goals which I agreed on at the beginning of my commitment with Wolfsburg's board have been reached.
"It was planned to take the team to a higher level, and nobody thought we
would achieve that within two years.
"I don't believe someone can work in professional football, on a long-term
basis, based on promises... and I was fortunate to get a good start to my time here."
Former Bayern Munich coach Magath has a four-year contract at Schalke and says he leaves Wolfsburg in rude health, having used the early exit cause in his contract to take charge at Schalke.
Magath will take over from both Dutch coach Fred Rutten and team manager Andreas Mueller who were sacked from their roles by Schalke earlier this year.
"We have already reached our sporting targets substantially faster than we planned in the summer of 2007 when I took charge," added Magath.
"This team is young and is bound to develop more in the future."
Magath has steered Wolfsburg to the top of the German league this season, while Schalke are up to seventh in the table after an indifferent season, and Hans-Dieter Poetsch, chairman of Wolfsburg's board, paid tribute to his work.
"We would like to offer our thanks to Mr Magath for his help over the last two years and for his extraordinary achievement in such a short period of time," he said.
Magath was sacked by Bayern in February 2007 despite leading them to the Bundesliga and German Cup double in both of the two seasons before, and has turned midtable Wolfsburg into table leaders.