The second appointment at the embryonic division follows that of chief executive Camilla Rhodes, formerly managing director of The Sun and the News of the World's holding company News Group Newspapers.
"Judy has great experience of many facets of the magazine industry and has shown enormous talent at News of the World," Rhodes said.
McGuire gives up the editor's chair at Sunday after 10 years in the role.
Andy Coulson, editor of News of the World, said: "Judy has kept Sunday at number one and she leaves the magazine in great shape.
"Her wider contribution to the News of the World -- both as Sunday editor but also as feature writer on the paper -- has been huge."
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