The Guinness Pro12 champions have been on the look-out for a new supremo since Lam informed them of his move to Bristol in December, and the long process is nearing completion.
A number of names, including new Ulster assistant Jono Gibbes, have been linked with the job and the Irish Independent understands that the highly rated MacDonald is the front-runner.
Any move for the 56-times capped All Black is complicated by the two-year deal he signed to become Crusaders assistant coach in August – it is not known whether Connacht would have to buy him out of that deal.
MacDonald (39), who retired in 2010, was previously linked with the Leinster job having impressed as head coach of provincial side the Tasman Makos before being hired by the Super Rugby franchise.
Connacht have previously been linked with former Fiji coach John McKee, while they are also understood to have spoken to ex-Munster coach Tony McGahan.
Having appointed Gibbes, Ulster will continue to look to strengthen their coaching ticket and former Wales scrum-half Dwayne Peel could be Les Kiss’ next addition as backs coach.
The Australian is re-working his backroom team after a disappointing campaign so far; Peel has been backs coach with relegation-threatened Bristol this season.
The English club yesterday announced the signing of All Black back-row Steven Luatua, who put the move down to the chance to work with Lam.
“I have a fantastic relationship with Pat and I enjoyed working with him at the Blues. I’m looking forward to taking on a new challenge with Bristol and contributing to the long-term vision of the club,” he said.