The Jamaica international, who scored 25 goals in 48 appearances during his debut campaign with the Holy Blues, has joined National League North side Farsley Celtic.
Gainsborough say the move provides the 39-year-old with the opportunity to "secure a longer term deal, closer to home, at a side placed higher in the pyramid".
Donaldson helped steer the club to the Northern Premier League play-offs, where they suffered an agonising defeat on penalties to 10-man Bamber Bridge.
He formed a potent partnership alongside team-mates Liam Waldock and Curtis Durose, with the trio netting 80% of the club's 74 league goals during the 2022/23 season.
Following his departure, Holy Blues boss Neal Bishop said: "Clayts has been superb for us since he came in. He came to us as I’d known him for a number years after playing with him at York.
"It was always a gentleman’s agreement that I would never stand in his way, if he wanted to move at the end of season.
"He has gone somewhere that will give him opportunities after he finishes playing, and he leaves with our very best wishes."
Photo credit: Gainsborough Trinity
Keep up-to-date with our exclusive email newsletters.
Subscribe