League sources told ESPN that Mosley agreed to a four-year contract with Orlando. The Magic later confirmed the agreement, but the team didn't disclose financial terms of the deal.
"We would like to welcome Jamahl and his family to the Magic family," Magic president of basketball operations Jeff Weltman said in a statement Sunday. "Within the NBA coaching community, Jamahl is considered a rising star. His coaching path is rooted in player development.
"He is a communicator and connector, and we look forward to him leading our group."
Mosley becomes the 15th head coach in franchise history and replaces former coach Steve Clifford, who mutually parted with the organization last month. The Magic had reached the postseason in consecutive years before deals at the trade deadline switched them into rebuilding mode this season.
The 42-year-old Mosley spent the past seven years with the Mavericks under former head coach Rick Carlisle. Mosley also served as an assistant for the Cleveland Cavaliers (2010-14) and Denver Nuggets (2005-10).
The Magic's search for a head coach had narrowed to two candidates, Mosley and Nuggets assistant Wes Unseld Jr. According to ESPN, Unseld also has emerged as one of the leading candidates for the Washington Wizards' coaching vacancy.