McDermott is best known for a blistering eight-year stint as head coach of English club Leeds Rhinos, winning four Super League championships.
No other coach in competition history has won as many.
McDermott's arrival looms as a huge boost for former Cronulla assistant Hannay, who is embarking on his first head-coaching role with the beleaguered Titans.
The 55-year-old has a 58 per cent winning record across 447 games as a club head coach and will arrive at the Titans in November.
"Brian's record speaks for itself," said Titans chief executive Steve Mitchell.
"He's one of the most respected minds in the game and what excites us most is the knowledge and professionalism he will bring to our coaching team under Josh."
At international level, McDermott coached USA for five games between 2015 and 2017.
He has since coached Championship side Featherstone to second place on the ladder in 2022 before joining Newcastle as an assistant coach to Adam O'Brien.
McDermott had been contracted at the Knights for 2026 and was considered an option to replace O'Brien once he stepped down following six years at the helm.
But he was permitted a release following the appointment of new boss Justin Holbrook.
The Titans have also welcomed back former football manager Scott Clark as their new head of operations after 10 years away from the club.
Clark had most recently served as chief executive of the Redcliffe Dolphins, the Queensland Cup affiliate of the Dolphins NRL side.
Earlier the Titans cleaned out their coaching ranks at the end of a dismal 2025 season.
Brett White, Jim Lenihan and Michael Monaghan all followed Des Hasler out the door.
Transition and NRL assistant coach Brad Davis was spared the axe and recently retired playmaker Kieran Foran will take up a specialist coaching role as planned.
The Titans are expected to announce the appointment of another assistant coach before pre-season begins.
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