A Swans life member, whose 111 games for the club included the 1996 Grand Final, McPherson is returning to football after taking a break from the game to concentrate on his newsagency business in the New South Wales town of Bowral.
"With the appointment of Daniel, that completes our coaching group for 2014," Melbourne football manager Josh Mahoney told melbournefc.com.au.
Originally from grassroots club Ganmain-Grong Grong-Matong, McPherson started his coaching career with North Shore in the AFL Sydney competition.
He became coach of the NSW/ACT Rams in 2005. A year later, he started working for Essendon as the Bombers' NSW recruiting coordinator.
In 2007, McPherson became a runner for Roos at the Swans in a part-time position.
He joined the club full-time the following season, working as a development coach with Brett Allison, who also recently joined the Demons.
McPherson coached the Swans' reserves in 2010.
Meanwhile, Melbourne has appointed former backline development coach Andrew Nichol to the position of player development manager.
Twitter: @AFL_AdamMcNicol
