Powell was released by Manchester United at the end of last season after failing to fulfil his potential at Old Trafford but despite the unceremonious exit, a number of clubs were interested in signing the talented midfielder/forward.
Confirmation was made on Tuesday that Championship outfit Wigan have won the race to recruit Powell and upon the completion of the transfer, Latics boss Caldwell has expressed his delight at luring the 22-year-old to the DW Stadium ahead of the likes of Wolverhampton Wanderers and Hull City, where he spent time on loan last season.
The 34-year-old told Wigan's official website of the former Latics loanee: "Nick is a quality player. he's the one player we wanted to get this summer and we are so happy we've got him.
"When I played with him, he was the best 19-year-old I'd ever played with.
"He's had a frustrating couple of years with injuries and not managing to settle anywhere, but we absolutely believe in him because he's a special player with the talent to get a stadium to its feet.
"He is still very young and has got so much more to give the game. We are delighted he can continue his progress with us."