The Rugby Football League has announced the 42-year-old will continue with the national team on a part-time basis whilst working as an assistant coach with the champion Australian side.
McNamara's future had been the subject of speculation since his previous, full-time, contract expired at the conclusion of the World Cup last month.
The former Bradford Bulls coach had expressed a desire to retain the England job but he was soon linked with the Roosters and a cross-code move to Bath.
Now it is confirmed McNamara will join the Roosters, working as assistant to former Catalan Dragons coach Trent Robinson, before linking up with England for next autumn's Four Nations tournament Down Under.
McNamara said: "I have a great team around me within the England camp and the RFL performance department and I will be maintaining regular contact with them all, as well as all the elite training squad players, following my move to Australia.
"It's always been an ambition of mine to coach in the NRL and the chance to work with the NRL champions is something that doesn't come along very often.
"I have a great relationship with Trent Robinson and am looking forward to working alongside him and the rest of the Roosters staff in what is a very exciting chapter in my career."
There has been no confirmation as to how long this arrangement will continue.
McNamara's move may take him away from the majority of England players during the regular season, but he will at least be closer to a small but growing group playing in the NRL.
Star full-back Sam Tomkins is joining New Zealand Warriors next year, adding to a strong core of Englishmen in the Australian competition including Gareth Widdop, James Graham and Burgess brothers Sam, George, Luke and Tom.
RFL chief executive Nigel Wood said: "It gives me great pleasure to confirm that Steve has agreed to continue as England coach into 2014 when we will be looking to build on the advances seen over the last four years.
"We have made considerable progress internationally over the past four years and this arrangement provides stability and continuity.
"It also allows Steve and the England coaching staff to continue working towards our goal of achieving the international success we so narrowly missed out on in Rugby League World Cup 2013."
McNamara was said to have had the best-prepared England squad ever for this year's World Cup after being given increased resources and greater time with players during his tenure.
The campaign was overshadowed by off-field disciplinary issues in the early stages but England only missed out on a place in the final when they conceded a last-minute try to New Zealand in a classic semi-final.