The derby takes place on Monday in Cincinnati.
The Blue Jays third baseman was voted into the all-star game on Sunday after receiving 14,090,188 votes — a new all-time single season record.
Joining him from the American League are Manny Machado, two-time champion Prince Fielder and Albert Pujols.
Joc Pederson, Kris Bryant, Todd Frazier and Anthony Rizzo will represent the National League.
Donaldson is ranked third and will face Chicago Cubs first baseman Rizzo in his matchup. The winner will face either Frazier or Fielder, while the winner of the Bryant-Pujols matchup faces Pederson or Machado.
The home run derby features a new format, including timed rounds and brackets. Brackets were based on season home run totals through Tuesday.
Each batter gets five minutes per round, and home runs in each batter's final minute stop the clock. Players can earn up to one minute 30 seconds of bonus time based on home run distance.
Donaldson has 21 home runs entering Wednesday's game against the Chicago White Sox.
Donaldson and Frazier are both competing in their second-consecutive home run derby after also attending last year's in Minneapolis.
With files from The Associated Press