The Seasiders, who will start next season in Sky Bet League One following their relegation out of the Championship, have handed Sam Allardyce's former number two McDonald a rolling one-year deal.
The 49-year-old has also been on the staff at Preston, Bolton, Crystal Palace and Leeds and succeeds Lee Clark in the post after he walked away from Bloomfield Road following a chaotic campaign both on and off the pitch.
"This is a great opportunity for me, it's a massive football club in my opinion and I'm really looking forward to the challenge," McDonald told the club's official website.
"It's a challenge that's going to be difficult - wherever you go it's always difficult - but it's a challenge that I'm really up for and really excited about.
"I've got to try and put my stamp on the football club and get it back to where it was
I've got to try and stabilise it first of all after what happened last year with relegation and change people's minds to try and get the confidence back and push the club on to pastures new."
Source : PA
Source: PA