McDonald, a West Point graduate and the former CEO of Procter and Gamble, will replace acting VA Chief Sloan Gibson. Gibson took over the post when Eric Shinseki resigned in May over management problems within the VA's health care system, especially long wait times.
McDonald graduated from West Point in 1975 and served in the U.S. Army for five years before joining Procter & Gamble. He served as CEO of the consumer goods company from 2009 to 2013.
A White House official told Politico that the administration wanted a VA secretary with significant management experience to lead a "huge agency" with 300,000 full-time employees.
"[McDonald] is the perfect person to lead the Department of Veterans Affairs during this important time," the official said.