Colloidal suspensions are an ideal model for studying crystallization, nucleation, and glass transition mechanisms, due to the precise control of interparticle interactions by changing the shape, charge, or volume fraction of particles. However, these tuning parameters offer insufficient active control over interparticle interactions and reconfigurability of assembled structures. Dynamic control over the interparticle interactions can be obtained through the application of external magnetic fields that are contactless and chemically inert. In this work, we demonstrate the dual nature of magnetic nanoparticle dispersions to program interactions between suspended nonmagnetic microspheres using an external magnetic field. The nanoparticle dispersion simultaneously behaves as a continuous magnetic medium at the microscale and a discrete medium composed of individual particles at the nanoscale. This enables control over a depletion attractive potential and the introduction of a magnetic repulsive potential, allowing a reversible transition of colloidal structures within a rich phase diagram by applying an external magnetic field. Active control over competing interactions allows us to create a model system encompassing a range of states, from large fractal clusters to low-density Wigner glass states. Monitoring the dynamics of colloidal particles reveals dynamic heterogeneity and a marked slowdown associated with approaching the Wigner glass state.