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Habas, 55, has an impressive CV, having also coached Celta Vigo and Valencia in the Spanish La Liga, during his 22-year career.
However, Habas's previous stint in the Premiership at Sundowns two seasons ago ended before the end of the season, when he reportedly received threats from the club's supporters.
"I am pleased to have been asked to be part of this ambitious project," he said on the club's website.
Initially, the side appointed former assistant coach Eric Tinkler and the side's development head, Ashley Makhanya, as interim coaches.
Wits chief executive, Jose Ferreira, said he was pleased to have secured Habas, to be assisted by his countryman Miguel Gonzalez Martinez.
"We are pleased to have secured the services of a highly experienced coach like Antonio Lopez," Ferreira said.
"He has a vast knowledge of the game and has worked in some of the most competitive professional environments in the world such as Spanish football and coached in two Copa Americas.
"His appointment fits in perfectly with this club’s vision and strategy to become a competitive and successful team in the Premier Soccer League.
"His extensive experience at development level will also ensure that our club continues to be at forefront of the development of some of the finest young talent in this country."
