The Ibrox No1 has never played a competitive game for his country but has been given the nod ahead of Sunderland's Craig Gordon. Gordon, 26, has played in the three qualifying campaign games so far but is out of favour at club level and has played just one competitive game since the end of November.
McGregor impressed during the Ibrox club's run to the UEFA Cup final last season and was faultless for his country in the 1-0 friendly defeat against Argentina in November. And Burley is confident McGregor will rise to the occasion at the Amsterdam Arena.
Speaking at Scotland's training base on the banks of Loch Lomond, Burley said: "There has been a lot of talk and speculation about the goalkeeping situation. People have had their say about the pros and cons of the situation and I thought it was important to make the decision now for the sake of the goalkeepers.
"I had a chat with both keepers on Tuesday and I'm fortunate to have three good keepers in the squad. But Allan will start in Amsterdam because Craig Gordon hasn't been playing for his club. He is a magnificent keeper and he understood the decision that I have taken. He has been very unlucky for Sunderland, he played when he had an injury and hasn't been able to get back into the side because of the form of Marton Fulop.
"Allan has been very consistent for his club and did well against Argentina. He played well for Rangers during their run in Europe last season. I think he deserves his chance."
Burley also confirmed that Spurs right-back Allan Hutton would not feature against the Dutch but will come into contention for the Iceland game at Hampden on Wednesday after completing 72 minutes of a reserve game against West Brom on Monday.
Paul Hartley has pulled out due to injury and becomes the fourth to withdraw from Burley's original squad. However, the Scotland manager confirmed that Barry Ferguson and Kenny Miller were both fit to play despite slight problems with the rib and hamstring injuries respectively.
Stephen McManus is rated 50-50 with an ankle injury and will be replaced by Wolves' Christophe Berra if he fails to make the Dutch clash. Despite the injury woes, Burley, a huge admirer of Dutch football, remains upbeat about his side's chances of causing a shock in a stadium where Scotland's last competitive appearance ended in a 6-0 defeat.
He added: "I've been an admirer of Dutch football since my days playing with a few of them in Ipswich. They have the right philosophy and bring up the youngsters in the right way. I am looking for a good performance.
"They are one of the top six sides in the world, they have fantastic individual players and we know how difficult it's going to be. We will have to go there and be hard to beat and we don't want to be a soft touch. We want to be strong and competitive, and then play ourselves. We have players that can pass it and our comfortable in possession.
"All the players are desperate to play. The call-offs happen, it's one of those things and I am immune to it now. As a manager you want to test yourself against the best and that's what Saturday will be about. But we will have 12,000 fans cheering us on and it's important we put on a good performance for them."
Burley believes the midfield area will be key for Scotland's chances to snatching a crucial result ahead of Wednesday's must-win clash at home to Iceland. And the Scotland coach is confident that the trio of Celtic's Scott Brown, Rangers' Barry Ferguson and Manchester United's Darren Fletcher can cause their own problems.
He added: "I have never had the chance to play them all together and I'm very excited about the prospect. They are full of energy and talent and I'm looking forward to seeing them playing together."