Gweedore player MacNiallais, 24, confirmed to the Donegal Democrat that he will be "taking a year out" from Rory Gallagher's squad.
MacNiallais is mulling over spending part of this year in the US.
"There was no fall out or anything with management or players. It is just for personal reasons," added MacNiallais.
The Gweedore man helped Donegal win the 2014 Ulster Championship and his ability to score long-range points has been a feature of the team's play in recent seasons.
McLoone confirmed before Christmas that he had opted out of the panel for this year but did not give a reason for his decision.
Donegal's season opens with their Dr McKenna Cup game against Ulster University of Sunday but the county has picked an under-21 squad for the season-opening competition.
Killybegs' Eoghan Ban Gallagher, Kilcar's Stephen McBrearty and Michael Carroll are the only members of the McKenna Cup squad with senior experience.
Under-21 boss Declan Bonner will be in charge of the team in the competition as the senior members of the squad have been given an extended break ahead of the Football League which starts in early February.
Donegal's football hopes for 2017 have suffered another blow after Odhran MacNiallais followed Leo McLoone in opting out of the squad for this year.