The 33-year-old called time on his second Motherwell stint this summer and was expected to return home to his native Australia.
However, the move fell through and United manager Ray McKinnon has snapped up the former Celtic and Middlesbrough centre forward.
"I had options in the Premiership and down south, but I believe that I can achieve success here," said McDonald.
"Being successful and enjoying my football is important to me and that means winning the Championship this season is the aim."
McDonald scored 11 goals in 40 appearances for Motherwell last season.
"Scott is an experienced player who has played at the top level," said McKinnon.
"His ability will enhance the team and his personality will impact in the dressing room also.
"He adds to our attacking options and the desire he showed to come to United ahead of other options tells me everything about his character. He is a winner and wants to help us win the title this season."
Dundee United have signed striker Scott McDonald on a one-year deal.