The 20-year-old Austrian will spend the 2013/14 campaign in northern Bavaria, subject to a medical.
"Raphael Holzhauser is a talented young player, who made 23 Bundesliga appearances for Stuttgart last season," said Augsburg coach Markus Weinzierl. "We really hope that he'll continue to develop here and that we can help each other to reach our goals."
"I'm really pleased the loan's gone through," explained Holzhauser as he prepared to link up with his new team-mates at their Ruhpolding training camp on Tuesday. "It's the right step for my development, I've followed Augsburg for a few years," the Under-21 international added. "They particularly impressed me during the second half of last season."