The 22-year-old arrived at Gateshead last summer after being released by the Magpies.
He had featured just six times for the Toon but was a regular for the Heed last term, scoring eight times and providing nine assists in 41 appearances.
Donaldson was offered a new deal by the Tynesiders but rejected it in favour of linking up with former Newcastle United academy coach Richard Money at Cambridge.
He has penned a two-year contract with the U’s.
Source: Newcastle United Mad