MacDonald has brought to an end a 17-year association with the club following the appointment of Paul Lambert as manager. The 51-year-old, who had a brief stint in caretaker charge at the start of the 2010/11 season following the departure of Martin O'Neill, worked alongside Alex McLeish last season and also coached the reserve team.
MacDonald told the club's official website: "I've had an incredible 17 years at Aston Villa, one of the biggest clubs in the country, and wish to thank all the staff and players I have worked with during my time at the club. I wish Aston Villa every success in the future."
Chief executive Paul Faulkner said: "As a club, we are immensely grateful for the contribution Kevin has made in more than 17 years at Villa.
"He has been an integral part of the success we have enjoyed at academy and reserve team level and, in assuming his caretaker responsibilities at the beginning of the 2010-11 season, he cemented his position as a man who will always command respect at this club.
"The whole of Aston Villa Football Club will wish Kevin well."