Balogun, 31, has impressed at Wigan since his loan move in January, helping the Latics achieve four clean sheets in six Championship matches and move away from the relegation zone.
Balogun joined Albion in the summer of 2018, making 12 appearances in total. He scored one goal for the club, a volley with his first touch in a 3-1 win against Crystal Palace.
Balogun who found it hard making first-team opportunities at Brighton and Hove Albion this season, making just one appearance in the EFL Cup victory at Bristol Rovers, has now agreed a permanent deal with Wigan.
Albion boss Graham Potter said, “Leon has always been extremely professional and good to work with during my time at the club, but he was finding it hard to get the game time he would have liked.
“So the loan move to Wigan seemed to be a good move for everyone involved, and he has made a really positive impact there.
“We would like to thank him for his contribution over the last couple of years and we wish him all the best for the next chapter of his career.”