Wilcox, 39, served as USC's defensive coordinator for the past two seasons but was let go by coach Clay Helton one day after Stanford defeated USC 41-22 in the Pac-12 championship game in December. Helton took over for Steve Sarkisian, who originally hired Wilcox.
"I think he's a great fit for Wisconsin and this program is a great fit for him," Chryst said in a statement. "His addition makes us better."
This will mark Wilcox's fifth defensive coordinator position in college. He was Boise State's defensive coordinator from 2006 to 2009 and helped the Broncos to a 49-4 record while leading the Western Athletic Conference in defense each year. He then spent two seasons at Tennessee as the Volunteers ranked 28th in total defense in 2011. In 2012 and 2013, Wilcox was Washington's defensive coordinator before he moved to USC.
Wisconsin presumably stepped up financially to nab Wilcox. At Washington, his annual salary in 2013 was $800,000 before he left for USC, which does not disclose coaches' salaries. Previous Wisconsin defensive coordinator Dave Aranda made $520,000 last year, while Badgers offensive coordinator Joe Rudolph made $570,000.
Aranda recently left Wisconsin for LSU.
During Aranda's three seasons at Wisconsin, the Badgers ranked first nationally in total defense, second in scoring defense, third in passing defense and fourth in rushing defense. Wisconsin returns seven defensive starters off a team that led the country in scoring defense and finished 10-3, defeating USC in the Holiday Bowl.
ESPN's Mitch Sherman contributed to this report.