MacLean, 53, has eight seasons of experience as an NHL coach. He was on Mike Babcock's staff at Anaheim and moved with him to Detroit six seasons ago. Three of their teams reached the Stanley Cup Finals, including the 2008 team that won the NHL title.
He was a head coach for several minor leagues teams, including the Quad City Mallards, which won the Colonial Cup title under MacLean in 2001.
"I thought Paul [was the right fit]," Ottawa General Manager Bryan Murray said during Tuesday's news conference. "He's been a player, a head coach and an assistant coach in the National Hockey League. He's been a winner wherever he's been."
Murray had hired Babcock and MacLean for Anaheim in 2002.
MacLean replaces Cory Clouston, who was fired by the Senators in April after the team missed the playoffs for the second time in three seasons. Ottawa was last in the Northeast Division with a 32-40-10 record.
He played in the NHL from 1980-91 appearing in a total of 719 games for the St. Louis Blues, Winnipeg Jets and Detroit Red Wings.