"It's a blow for us because Dean has been excellent during his time at the club.
"We'd like to thank Ipswich for letting us take Dean on loan and hope that the clubs can work together again in the future."
With the news that another striker, Billy clarke, is now injured for the hectic Christmas period, Joe Royle wanted the youngster back at Portman Road.
McDonald will still play for Hartlepool this weekend, against Walsall, after which his loan spell will expire. He scored his first senior goal against Bournemouth last weekend and has become popular with the Hartlepool fans.