McDonald told the Lions of his decision yesterday, saying his body, which has endured numerous operations over the past five years, could not withstand an 11th AFL season, the Courier Mail reports.
Coach Leigh Matthews last night confirmed the 28-year-old was left with little choice.
"His body just won't do it," Matthews said.
"He hasn't even been able to do summer training. His body is just shot.
"He has decided that rather than beating his head against the wall trying to get ready to play, it was time to give it up."
McDonald will officially be placed on the long-term injury list, which allows the club to elevate a rookie-listed player.
Young ruckman Joel Tippett will make his debut in the NAB Cup against Essendon on Saturday night.
"A rookie will be upgraded and I guess the tallest of them would be a chance," Matthews said of Tippett's claims.
McDonald was a big part of two of Brisbane's AFL premierships.
In the 2001 Grand Final, McDonald who took the ball from a throw-in and fed Michael Voss for the snap on goal which sealed the Lions' historic flag.
In 2002, McDonald was rushed to hospital after badly dislocating shoulder during the match but once the joint had been put back he hailed a cab and raced back to the ground, jumping the fence of the MCG barefooted and running to join his mates on the stage.
Matthews last night paid tribute to the work McDonald did to try to resurrect his career.
"I can vividly remember at Subiaco Oval when he jumped in the centre square and went down holding his knee and virtually didn't play for three years," Matthews said.
"He persevered and persevered, but he has never been the same player since."
In the five seasons that have passed, he has managed only 16 more games to take his final career tally to 91.
McDonald made a brave comeback in 2006 in his home town of Perth against the Eagles but badly tore his hamstring in a soccer game during the mid-season bye, wrecking his season.
Again last year he fought back for eight senior games, but a hip injury hampered him and the club's 2006 top draft pick, Matthew Leuenberger, grabbed the opportunity and cemented his spot with an unbroken nine-game run to the end of the season.
