McDonald, who will join M&S in the autumn, will have overall P&L accountability for all aspects of the M&S non-food business as managing director for clothing, home and beauty – a newly created role.
She will report to chief executive Steve Rowe, who will give up his non-food responsibilities to McDonald when she arrives. Helen Weir, the chief financial officer, will also hand over responsibility for clothing home and beauty supply chain and logistics.
Womenswear chief Jo Jenkins will take up the new role of clothing and beauty director, reporting to McDonald, with expanded responsibilities for all clothing across womenswear, menswear and kidswear.
McDonald will also be part of the M&S operating committee, the team accountable for the day-to-day running of the business and the development and execution of strategy.
The appointment marks the latest in several changes at M&S, which recorded growth in its clothing business for the first time in two years in January.
Last summer it split with 16-year incumbent ad agency Y&R London and hired Grey London. Last week the retailer announced it would begin a "soft trial" of online grocery delivery this autumn.
Meanwhile McDonald is joining M&S after starting at Halfords as chief executive in 2015, when she left McDonald's after nine years as UK chief executive and president of North West Europe.
Having begun her career as a graduate marketing trainee with Colgate Palmolive, she joined British Airways as a brand manager in 1990 and stayed there for 16 years, rising to head of global marketing, before joining McDonald's in 2006.
Rowe said: "I am pleased with the progress we have made in clothing and home over the last year and the time is now right for this appointment.
"Jill is an excellent addition to the M&S senior leadership team and we are delighted that she is joining us. Jill’s first-class customer knowledge and great experience in running dynamic, high achieving teams make her exactly the right person to lead this all-important part of our business from recovery in to growth."