Reilly, the former Great Britain coach who has achieved unprecedented success for an Englishman in Australia by guiding the Newcastle Knights to the Premiership last season, is to come home in November.
The Giants, currently bottom of the table and thankful for the suspension of relegation, will be looking to him to revive their fortunes next season.
"We are delighted to be able to bring in somebody of Malcolm's calibre," the Huddersfield chairman, Ken Davy, said. "It shows that we mean business."
Reilly has agreed an open-ended contract to begin when Newcastle finish their commitments and is keeping on Phil Veivers, the caretaker-coach since the sacking of Garry Schofield last month, as his assistant.
Although his club coaching career in this country, with Castleford, Leeds and Halifax, was mixed, his arrival will be a significant boost for a club that has looked out of its depth in its first season in Super League.
Gateshead also have reason to believe that they have hired the ideal man for the job. McRae has the unique record of being involved with three international sides, New Zealand and Great Britain as well as his native Australia, and that is some indication of his standing in the world game.
Kath Hetherington, one of the partners in the Gateshead franchise, said: "We are absolutely delighted that Shaun will be our first coach. His record over three years with St Helens is unbelievable. For a new team to have landed a coach of his quality is a superb start."
Apart from his achievement in winning two Challenge Cups and the inaugural Super League championship with Saints, McRae's three seasons in England has given him the necessary knowledge of the way the game ticks here.
It is to Australia that he has looked for his first signings, though, with the announcement that two players of international quality, Kerrod Walters and Danny Lee, will be with Gateshead next season. Walters, a member of a famous rugby league family and capped eight times as a hooker by Australia, is the club's first capture and seems the obvious choice as captain.
Lee, a prop with the Cronulla club whose former chief executive, Shane Richardson, is taking on a similar role at Gateshead, toured Britain with the Australian Super League squad and is one of the most respected forwards in the Australian competition.
"He has always had a reputation as a workhorse and that is the sort of player we will need in our first year," said McRae, who added that he would also be in the market for English players, as well as looking to develop the talent already coming through the Gateshead Academy side.Reuse content