Mularkey, the former offensive coordinator for the Atlanta Falcons, will be introduced at a Wednesday news conference, the Jaguars said on their Twitter account.
The Falcons averaged 376.6 yards per game in 2011 under Mularkey, a franchise record.
The 50-year-old previously was head coach of the Buffalo Bills from 2004-05. He compiled a 14-18 record at the helm of the Bills.
He replaces defensive coordinator Mel Tucker, who took over on an interim basis after Jack Del Rio was fired Nov. 29.
The Jags stumbled to a 5-11 mark this past season, missing the playoffs for the fourth straight year.