After spending an initial period at the club as interim Manager, McKinna will now guide the Blades for the entire campaign, whilst being retained by the Mariners in a consultancy capacity, assisting the club in commercial and football matters.
The deal is part of the club's involvement with the Sheffield United International Group - of which Chengdu is also a member - and sees the popular 49-year-old become the first Australian to coach a professional Chinese team.
"Obviously I'm delighted to be back involved as a coach here at Chengdu, but to be able to remain a part of the Mariners is something that's very close to my heart.
"The two clubs have a very close relationship and this move opens up an opportunity for me to get back onto the touchline," said McKinna.
McKinna was named Coach of the Round after his side claimed a typically gritty 3-3 draw against reigning CSL champions Shandong Luneng at the weekend, with goals coming from former Sydney FC and North Queensland Fury marksman Brendon Santalab, and on-loan Mariners striker Adam Kwasnik.
Mariners Chairman Peter Turnbull was delighted that an arrangement could be made to retain the services of a much-loved long-time club servant like McKinna.
"This is obviously a superb chance for Lawrie to expand upon his already impressive coaching experience while remaining a part of the Mariners family.
"Our club is about to embark on another foray into the Asian continent, and having a club representative involved on a day-to-day basis will no doubt be of great benefit to both Chengdu and the Mariners.
"Naturally we wish Lawrie all the very best for this season with the Blades in China, and look forward to working with him as we move into another exciting chapter in our club's history," Turnbull said.