Confirmation has yet to be announced by the club but it is believed that he will leave by mutual consent after entering the final 12 months of his contract at The Riverside.
It is thought that he will now hold talks with Millwall over a possible move to Boro's Championship rivals.
The Australian joined Middlesbrough from Celtic in early 2010, having previously spent time with Motherwell.
McDonald has been a key player for Boro over the past few seasons but his future was the subject of speculation all last term, with the club reportedly keen to get one of their highest earners off their wage bill.
He admitted that he was braced for another summer of transfer speculation, and it is now understood that he will become a free agent.