It is a record sale for the SPL club, with the previous record - which saw Paul Hartley swap New Douglas Park for Millwall for £380,000 in July 1996, being more than trebled.
The starlet had caught the eye of Celtic, Tottenham Hotspur, Burnley and Portsmouth over the summer, and had previously been linked with moves to both Liverpool and Chelsea.
However, it was the Latics who have eventually secured the services of the Republic of Ireland U21 international, much to the delight of Martinez.
“There were several clubs chasing James and it is fantastic that he has chosen Wigan," he said.
"He had a very difficult decision to make, and fair play to him, he took his time to weigh up all his options, take advice and make his mind up.
"That shows a huge amount of maturity for a boy of his age, but then maturity is probably the one word I would use above all others to describe him.
“He has the ability to become a big player in the future and it is great to have him on board.”
McCarthy will now fly out to join his new Wigan team-mates at their Austrian training camp and will be available for the Latics’ friendly against PFC Minyor on Friday.
