The announcement was made Tuesday by Badgers' Head Coach Bret Bielema.
"Matt has a terrific history as an offensive coordinator and has excelled at developing quarterbacks throughout his career," Bielema said. "I know he is very excited about running a pro-style offense and handling a game the way we typically have at Wisconsin. I think this is a great hire for us and I can't wait for him to get to work with our coaches and players."
Canada served two stints as an offensive assistant coach at NIU, first from 1998-2003 and again this past season. In between he spent seven seasons as an assistant coach at Indiana.
This past season NIU's offense ranked 12th in the nation behind MAC MVP Quarterback Chandler Harnish.
"I'm truly excited for the opportunity to come to Wisconsin," Canada said. "It's a program that I've followed closely for a number of years. I've always been impressed with their tradition, especially offensively with their style of play, and I can't wait to be a part of that."
Canada is 39 years old.