Munster revealed in February that McGahan would leave the two-time Heineken Cup winners at the end of the current campaign following four seasons in charge.
The Queenslander had been expected to join the Wallabies but his appointment as coaching co-ordinator under boss Robbie Deans had not been forecast.
McGahan will be joined in a new-look coaching set-up by Andrew Blades and Nick Scrivener as Australia look to move on after last year's World Cup semi-final defeat to New Zealand.
The trio are set to be in place in time for the Wallabies' one-off Test against Scotland on June 5, before the three-match series against Wales.
"McGahan's experience as a head coach is considered a major asset for the newly created role, where he will have a significant involvement in the overall co-ordination of the coaching and management team, as well as the player liaison, assisting head coach Robbie Deans," an Australian Rugby Union statement read.
Former World Cup winner Blades returns as defence coach for a second time while Scrivener, the former Edinburgh and Scotland A coach, takes over as coaching assistant.
McGahan is set to lead Munster into the RaboDirect Pro12 semi-finals next month after they confirmed their place with a 20-20 draw against the Scarlets at the weekend.