McMahon is set to share his services between the Magpies and Carlton at the VFL level, with the athletic key-position player likely to spend time in defence after showing strong signs as a backman with Collingwood's reserves in 2022.
The 20-year-old was drafted to Collingwood as a key forward out of the Northern Knights, however shifted into the backline this year.
McMahon was cut by Collingwood after failing to feature for the club's senior side in his two years at Olympic Park, joining Isaac Chugg and brothers Callum and Tyler Brown in being delisted by the Magpies in September.
On Tuesday Montmorenecy revealed McMahon as their latest recruit.
"We are pleased to announce that Liam McMahon has signed to play for the club next season," a club post reads.
"Liam spent time at both Eltham and Greensborough in his junior days before progressing onto the Northern Knights.
"He was drafted in 2020 to Collingwood and is now listed with Carlton VFL. He is a big lad who can play down back and will feature with his intercept marking and rebounding."