Nathan Jones will be the club's new manager after an agreement was reached with Saints.
Jones met with the team on Wednesday and agreed on a long-term deal.
The compensation package for Jones and his assistants is thought to be around 2.5 million pounds.
The 49-year-old will be confirmed as the new manager of the Saints on Thursday.
Jones admitted that he was a fan of Saints after his former club's 2-0 loss to the Potters.
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He said that he hadn't wanted to speak to people before. This is not the same because of the situation and the club. Something really special will need to take me away from this place.
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Jones led Luton to the Championship play-off semi-finals last season, but they lost to Terriers. The club was promoted from League Two when he was first appointed.
After nine months in charge of the club, Jones was sacked and returned to the club in May the next year.
They are two points adrift of the play-offs after 20 games.
Hasenhuttl had been in charge of the club for almost four years.
The Austrian took over at St Mary's in December of last year but left the club in the bottom three.
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Laura Hunter works for Sky Sports.
They are taking a huge leap of faith. There are similarities between outgoing manager Ralph Hasenhuttl and Nathan Jones.
The Austrian had an animated style. It's what initially made him popular with fans, and what eventually made them dislike him. His passion was appreciated by all associated with the club. He was thanked for his "unwavering commitment".
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He has been known to end up in the stands while celebrating. It's a way of life. Graham Potter, for example, is a mild-mannered and understated manager.
When a goal is scored, Hasenhuttl would run half the length of the pitch and the Welshman would do the same. That doesn't guarantee success, but supporters are more likely to take to a manager that invests in their club.
Jones has delivered results on a shoestring budget in the past. He has proved that he can punch above his weight by getting the most out of players while managing a lot of money.
He is a good coach and will benefit the young side. There are two players who have profited from Jones.
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The reason why they have plumped for a new manager is due to the fact that they have a motto. They can't afford to outspend their competitors so they focus on maximizing in other areas. There is a focus on clever scouting and recruitment, player development pathways and innovative uses of sport science.
Appointing a manager with no previous experience in the premier league is a risk but one that fits with their methodology. Hasenhuttl had only been in the German top flight for a short time before he was posted in the English top flight.
Fans will like Jones' footballing philosophy of pressing high and playing with an attack-minded approach. Every year of his managerial career, he has improved his league position.
His 10-month spell atStoke City will be a cause for concern. There won't be expectations on this weekend's trip to Anfield, but there needs to be.
Saints haven't spent Christmas in the drop zone of a league campaign since 2004, when they were demoted from the top flight.
The St Mary's hierarchy will be hoping that Jones is able to steer the Saints away from that situation.
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Sky sports' Dan Sansom.
You have to accept that we will lose a lot of games.
When I talked to Hasenhuttl at the training ground on Friday, he said those things.
He lost his job as manager of St Mary's after they were thrashed by the Jets.
After 14 games, the Saints are in the bottom half of the table. They have lost eight times in the first eight weeks of the season in the premier league.
He was used to pressure on the south coast. Since the Austrian's appointment in December, two 9-0 defeats and several poor runs of form resulted in his position being questioned. The 55 year old was always bouncing back.
After spending £83m on new players this summer, the Saints have lost six of nine games in the premier league.
The team is fighting for survival. They're going down unless they improve on being more aggressive and willing to take one for the cause.
With Hasenhuttl still in charge, it wasn't worth taking that risk.
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