After spending two seasons at Sale Sharks, the All Black centre has decided to return home to New-Zealand at the end of the season.
McAlister has signed a deal with the New Zealand Rugby Union which will take him through to 2012 and make him eligible to play for the All Blacks in the 2011 World Cup.
The former Auckland Blues player arrived in Sale in 2007 following the World Cup in France and made ten European appearances for the Sharks including a Heineken Man of the Match performance in the Heineken Cup Round 6 clash with ASM Clermont Auvergne
"The simple reason why I am heading home is a desire to be closer to my family who are very important to me. The fact that I can continue my rugby career in New Zealand is obviously fantastic and I appreciate being given the opportunity, but family comes first." said McAlister.
"But before I leave Sale, we have a good chance of finishing the season in style and, hopefully, I can help give the Sale Sharks fans, who have been fantastic to me, a great end to the season."
Sale director of rugby Kingsley Jones said the door would always be open for the midfield powerhouse if he wants to return.
"He's been fantastic for us in every way I hoped and the door will always be open for Luke to return to the club. The fact that he has taken so long to make this decision shows how hard it has been for him.
Hopefully on return from injury he will help us finish the season in style, which I know is what he desperately wants." added the coach.