Magath returns to the Bundesliga to take the reins at a Hertha side currently sitting second from bottom in the standings and without a win in 2022.
"Felix Magath's resume speaks for itself," said Hertha's managing director for sport Fredi Bobic. "We have been able to find a coach who has proven he has the experience needed in order to help us out of the challenging situation we find ourselves in."
Magath famously led Wolfsburg to their one and only Bundesliga title in 2009, having become the first coach in Bundesliga history to win two consecutive Bundesliga and DFB Cup doubles with Bayern Munich in 2005 and 2006.
The 68-year-old also coached Hamburg, Werder Bremen, Nuremberg, Stuttgart, Eintracht Frankfurt, Schalke and Wolfsburg before a brief spell with Fulham in England and his last coaching role at Shandong Taishan in 2017.
He becomes Hertha's third coach this season, replacing Korkut, who was brought in to replace Pal Dardai at the end of November and enjoyed a promising start in charge of the Old Lady, picking up four points from his first two games at the helm.
Despite then suffering a heavy defeat against Mainz, Hertha enjoyed a 3-2 win against Borussia Dortmund in their last game of 2021.
However, following a run of five consecutive defeats, culminating in Saturday's 2-0 reverse at Gladbach, the Berliners decided to seek an alternative to lead the team into their final eight games of the season.
"After an intensive analysis and evaluation of the current sporting situation, the management of Hertha Berlin have decided to release Tayfun Korkut from his position as head coach of the team with immediate effect," an official Hertha statement read.
Bobic, added, "First of all, I would like to thank Tayfun Korkut and his assistant Ilija Aracic for their commitment to Hertha since November. After a promising start with seven points from the first four games and a positive trend, we have now openly and clearly analysed the performance and results of the nine games in the second half of the season and have come to the decision to make another change in the coaching position."
Magath's first game in charge comes next Saturday, when Hertha host Hoffenheim at the Olympiastadion.