A special Ard Fheis will be held on the 10th of February to ratify the change.
McDonald, who's now deputy leader, has been a member of the lower house of the Irish parliament since 2011.
Many party members have been tweeting their support for Ms McDonald.
Addressing the Belfast meeting, Ms McDonald said she believes her leadership will mark a defining chapter in the achievement of a United Ireland. She called for Irish unity, describing it as "the best solution, the best collective arrangement". "We have to modernize, we have to be fit for goal, fit for our task", McDonald said in a speech to party members in Belfast.
She will take over from Gerry Adams.
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Ms McDonald added: "Some of you have said to me "you have very big shoes to fill". But the news is that I brought my own.
Ms McDonald's judgment was called into question by political opponents following her response to the controversy caused by former Sinn Féin MP Barry McElduff's offensive social media post about the Kingsmill massacre.
"For us in Sinn Fein in the time ahead, we have to grow our party, not just our mandate but also our capacities".
Mr Adams is stepping down from the position next month and used the occasion to confirm that Ms McDonald is the only candidate proposed to succeed him.
After a stint in the European Parliament, she became a TD in February 2011.
McDonald, 48, has been a member of Sinn Fein, a left-wing party in both the Republic of Ireland and Northern Ireland, since 2004.