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Wagner has been out of work since he left the Terriers by mutual consent in January.
He joins Schalke on a three-year deal and replaces interim boss Huub Stevens, stepping in for Domenico Tedesco, who was sacked in March.
Wagner used to be in Schalke’s ‘enemy camp’ having been in charge of rivals Borussia Dortmund’s reserve team from 2011-15.
Schalke have had a bad season in the Bundesliga, currently lying 15th in the table but are safe from relegation with two games to play.
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