The goalkeeper is the team's current longest-serving player and has featured 140 times since joining from Sunderland's development squad back in July 2017.
She has played a pivotal role in the success of the side since her arrival, winning the Golden Glove award in both 2022/23 and 2023/24 as the team secured back-to-back promotions from the FA Women's National League (FAWL) Division One North and Northern Premier Division.
Alongside those individual and team accolades, the 26-year-old has also won Players' Player and Manager's Player of the Year across her time on Tyneside.
During her eight-year spell with Newcastle United, Donnelly has played an important role in the progress of the team and went on to sign her first professional contract ahead of the 2023/24 campaign, alongside her team-mates.
It was at the start of that season when the shot-stopper was given the role of club captain.
Donnelly said: "When I first joined Newcastle United Women, I wouldn't have believed you if you told me what I would go on to achieve. It was beyond my wildest dreams, and I can say that I am happy to leave the shirt in a better place than I found it.
"I want to say a massive thank you to all of the fans for their support over the years, I have appreciated it all.
"To all of the players and staff that I've met across the last eight years, you have all brought something special to the club and I have made some of my best memories with you all.
"Thank you to Caroline and Michael Toon as well as Grange Villa FC, particularly Colin and Scott Harrison, for sponsoring me in the early days, it wouldn't have been possible without your support.
"Finally, to my family, especially to my mam who supports me at every game, and my dad who I know will be really proud looking down on me. Thank you for everything along the way."
Newcastle United Women manager, Becky Langley, said: "Grace has helped the team win back-to-back promotions and gain their spot in the Women's Championship.
"Grace was here when I first started, playing for just the love of the game. She has helped myself and the team on and off the pitch hugely. We wouldn't be in this position without all her commitment and contributions.
"She has played for the team she loves for two seasons as a full time professional which most fans would only be able to dream of. I wish her every success in the future."
