The 19-year-old spent the first half of the 2022-23 campaign on loan with Crawley Town and made a name for himself with the League Two side, posting three goals and an assist in 17 matches.
A groin injury hampered Balagizi's loan spell with Crawley, though, and he only played eight minutes for the Reds' Under-23 team upon his return to Anfield in January.
After signing a contract extension with Liverpool, Balagizi touched down at the DW Stadium and expressed his delight at the move, telling wiganathletic.com: "I'm so excited and ready to get going. It's a massive Club with massive history - and speaking to the Gaffer and everyone around the Club, they made me feel really comfortable in coming here.
"The best way for me to develop is by playing as many senior games as possible. Last year, my first loan was a good experience for me, and hopefully, I can further my development here."
Balagizi plied his trade in the Manchester City academy before joining Liverpool as an Under-11s player, and he made the bench on two occasions during the Reds' triumphant FA Cup and EFL Cup runs in the 2021-22 season.
The 2003-born midfielder has also earned three caps for the England Under-20 team but was not called up to the Three Lions' squad for the recent World Cup.