The 40-year old, who has coaching experience with Sheffield Wednesday, has been named as an assistant coach by interim manager Gavin Wilkinson who replaced the sacked John Spencer last week.
"Sean has a wealth of knowledge and coaching experience," said Wilkinson.
"He understands our club philosophy and objectives and will help maximize the potential of our young players. Sean will be a tremendous addition to the coaching staff."
McAuley,, who had a playing stint with the Timbers in 2002, added: "I'm extremely excited and honored to be joining a great organization in the Timbers.
"When I was presented the opportunity to join the staff there was no hesitation in my mind that it was the right career decision for me. I have seen the growth in the club since I played there in 2002 to where it is now; it's phenomenal.
"I am leaving a club in Sheffield Wednesday that is on the up, and I wish the people there every success and they have been very understanding of my decision. I hope the best for them in the future."