Donahoe, who has been on Nike's board since 2014, will join the sneaker maker from cloud computing firm ServiceNow Inc NOW.N , where he was CEO for more than four years.
Mr Parker said on Tuesday the change was part of Nike's efforts to accelerate the "digital transformation" of the company's business. During his tenure, the company's market capitalisation has more than tripled.
Credited with creating the popular Nike Air sneakers as well as other pioneering products, Parker, in the past few years, oversaw Nike's shift to selling directly to customers online and its success in global markets, particularly China.
"John Donahoe has been an exceptional leader for ServiceNow, championing a purpose-driven culture, strong customer focus and product innovation, and achieving outstanding shareholder value", lead independent director of ServiceNow's board of directors Jeff Miller said.
Nike in August bought Celect, a Boston-based predictive analytics company; past year it acquired Zodiac, a consumer data analytics startup, and Invertex, a computer vision startup; and in 2016 it bought Virgin Mega, a digital design studio.
Nike also came under fire for featuring an ad with former NFL player Colin Kaepernick, who sparked a national controversy by kneeling during the national anthem.
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"Nike has had their fair share of scandals and issues. and they didn't really go out and look externally".
Parker denied that his departure had anything to do with the various scandals plaguing the company under his leadership.
News of McDermott's appointment comes as ServiceNow publishes its preliminary third quarter 2019 financial results, with the company touting subscription revenues of US$835 million, representing 35 per cent year-over-year growth.
The company is betting on McDermott to take ServiceNow to the next level.
ServiceNow shares fell about 16 percent on the development.
Nike announced the management shakeup just hours after Under Armour revealed that its founder, Kevin Plank, would also be stepping down from his role as CEO.