The 21-year-old, who spent last season on loan at Blackburn, was initially linked with another temporary spell in Lancashire at the DW Stadium.
But Wigan manager Roberto Martinez has secured Di Santo permanently after he underwent a medical on Tuesday afternoon to join midfielder Tom Cleverley, who joined on loan from Manchester United earlier in the day.
"We've been following Franco for a long time and from his point of view it's clear that he is desperate to play for Wigan and his desire and commitment is exactly the right attitude for our club," said Martinez.
Martinez added: "Franco is an Under-20 international for Argentina with great Premier League experience having worked at a club with the calibre of players of Chelsea, and also spending a hugely beneficial year on loan at an established club like Blackburn.
"We all feel that Franco can fulfil his potential at our football club and he'll bring a completely different dimension to our squad with his presence, technical ability and hard-work.
Di Santo, brought to England by Chelsea in 2008, made 22 appearances for Blackburn last season but scored just once.
"I am just happy that my future has been sorted out now. I can't wait to start training, meet all my new team-mates and start fighting for my place in the team," said the Argentinian.
"Roberto Martinez has big ambitions for the club and he made it clear how much he wanted me to be here.
"When a manager is so positive about you, then it is an easy decision to make."