McStay's departure to the Magpies has long been touted but the forward has formally told the Lions of his pending move, citing a desire to closer to family in Melbourne.
"I've had an amazing nine years (in Brisbane) with great support from both the playing group and staff," McStay said in a statement on Friday.
"They have helped me grow both on and off the field and I'm incredibly grateful for the opportunity the Brisbane Lions have given me to fulfil my dreams of playing AFL football.
"My partner and I have decided to move back home to Melbourne."
McStay, pick 25 in the 2013 national draft, played 161 AFL games for the Lions.
"Dan has been a great teammate in his time with the Lions and remained committed to our cause until the end," Brisbane's football manager Danny Daly said.
"He stuck with the club during many lean seasons and played a vital role in helping the Brisbane Lions play finals football the past four seasons."
McStay leaves Brisbane as an unrestricted free agent and is set to join the Pies along with GWS forward Bobby Hilly and Adelaide utility Billy Frampton, who have both told their current clubs of a desire to be traded to Collingwood.
The Magpies this week delisted Callum Brown and his younger brother Tyler, as well as Isaac Chugg and Liam McMahon, to free up list space for the looming recruits.
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