Athletic director Gary Barta announced the hiring in a release Sunday and said McCaffery would be introduced in a press conference on Monday in Iowa City.
McCaffery went 112-51 in five seasons at Siena, leading the Saints to three consecutive NCAA tournament appearances. Siena lost to Purdue in the first round this year and finished with a 27-7 record.
McCaffery replaces Todd Lickliter, who was fired after Iowa went 10-22 this year.
The Hawkeyes last made the NCAA tournament in 2006 -- losing to Northwestern State on a 3 at the buzzer -- and coach Steve Alford left for New Mexico following the 2007 season. While Alford has built the Lobos into a force in the Mountain West Conference, Iowa hasn't had a winning season since he left.
Once one of the top programs in the Big Ten, the Hawkeyes went 38-58 under Lickliter while sinking to the bottom of the league.
McCaffery spent six seasons at UNC-Greensboro, posting a 90-87 record, before taking over at Siena before the 2005-06 season. McCaffery also coached Lehigh for three seasons, guiding it to the NCAA tournament in 1988, before leaving to become an assistant at Notre Dame.
Though Iowa appeared to be on track for improvement in 2010-11, Barta let Lickliter go on March 15. Barta cited a slumping record, lagging attendance and dwindling revenue from ticket sales and contributions in announcing Lickliter's dismissal.
Lickliter saw a number of key players transfer during his tenure. One of McCaffery's first duties is to make sure the Hawkeyes' current core of players, including sophomores Matt Gatens and Aaron Fuller and promising freshmen Eric May and Cully Payne, stick around to help him rebuild the program.