Chiefs Rugby Club CEO Michael Collins commended McMillan on his appointment.
"We are excited for Clayton to lead the Gallagher Chiefs in 2021. He is a talented coach and was a stand-out candidate.
"He boasts an excellent track record of developing players and delivering success.
"Not only during his tenure as the director of rugby for the Bay of Plenty Rugby Union, but during the Maori All Blacks and New Zealand Provincial Barbarians campaigns.
The results he has achieved reflect his leadership ability.
"Clayton is no stranger to the Gallagher Chiefs team having already worked alongside assistant coaches Roger Randle and David Hill and a number of the Gallagher Chiefs playing group," said Collins.
New Zealand Rugby Head of Professional Rugby Chris Lendrum congratulated McMillan on his appointment.
"It's a unique opportunity and I am sure Clayton has the mana to work within the Chiefs environment and continue to build on what Gats and his crew are currently achieving."
McMillan said he was grateful for the chance to lead the Gallagher Chiefs.
"Super Rugby has certainly been a goal of mine; there is a fantastic pool of gifted athletes to work with along with an experienced and talented management group."
Bay of Plenty Rugby Union CEO Mike Rogers puts McMillan's selection down to his dedication and commitment to coaching.
"This is great recognition for Clayton. We are delighted for him and very proud. He has been an outstanding contributor for Bay of Plenty Rugby and the Maori All Blacks.
"It was only going to be a matter of time before he was going to be successful in gaining a position at the Gallagher Chiefs or another Super Rugby franchise."
Following his playing career in Bay of Plenty and Japan, the Bay of Plenty centurion transitioned into coaching 18 years ago while finishing playing professionally in Japan.
Upon his return to New Zealand he has held several age group and club roles in both Bay of Plenty and Wellington before taking the reins of his home province in 2015.
McMillan's coaching success has included being appointed the New Zealand Provincial Barbarians Head Coach in 2017 to face the British and Irish Lions during their 2017 tour of New Zealand.
Later that year he was announced as the incoming Maori All Blacks head coach. McMillan has since led tours to the Northern Hemisphere, United States and Fiji.