Huggins previously coached the Cincinnati Bearcats, but his contract was bought out last year. Under Huggins, Cincinnati was placed on a two-year probation in 1998. He also was arrested for drunk driving in 2004.
His 16-year career with Cincinnati produced a 399-127 record, 14 NCAA Tournament appearances and a trip to the Final Four in 1992.
Huggins replaces Jim Wooldridge, who was fired after the Wildcats lost in the opening round of the Big 12 Tournament.
"Are there risks involved with this hire? Absolutely," said Kansas State Athletic Director Tim Weiser. "But I believe we are in a great position to be of assistance to help Coach Huggins resume his career and accomplish the goals we have for our program."