Masiello, who played at Kentucky and was an assistant to Rick Pitino at Louisville, led the Jaspers to the NCAA tournament this season and a near-upset of the Cardinals in the second round last week.
He interviewed with new USF athletic director Mark Harlan on Monday.
Masiello, 36, had a 60-39 record in three seasons at Manhattan. He is regarded by many as one of the top young coaches in the country.
He takes over a South Florida program that went 12-20 in its inaugural season in the American Athletic Conference. The Bulls have finished 3-15 in league play each of the past two seasons.
Former Bulls coach Stan Heath took the team to the NCAA tournament two years ago and received an extension, but the school bought out the remaining $1.5 million on his contract.