In 3D-domain-swapping, two protein monomers exchange a part of their structures to form an intertwined homodimer, whose subunits resemble the monomer. Several viral proteins domain-swap to increase their structural complexity or functional avidity. The main protease (M^pro) of the SARS coronavirus proteolyzes viral polyproteins and has been a target for anti-SARS drug design. Domain-swapping in the α-helical C-terminal domain of M^pro (M^proC) locks M^pro into a hyperactive octameric form which is hypothesized to promote the early stages of viral replication. However, in the absence of a complete molecular understanding of the mechanism of domain-swapping, investigations into the biological relevance of this octameric M^pro have stalled. Isolated M^proC can exist as a monomer or a domain-swapped dimer. Here, we investigate the mechanism of domain-swapping of M^proC using coarse-grained structure-based models and molecular dynamics simulations. Our simulations recapitulate several experimental features of M^proC folding. Further, we find that a contact between a tryptophan in the M^proC domain-swapping hinge and an arginine elsewhere forms early during folding, modulates the folding route and promotes domain-swapping to the native structure. An examination of the sequence and the structure of the tryptophan containing hinge loop shows that it has a propensity to form multiple secondary structures and contacts, indicating that it could be stabilized into either the monomer- or dimer-promoting conformations by mutations or ligand binding. Finally, since all residues in the tryptophan loop are identical in SARS-CoV and SARS-CoV-2, mutations that modulate domain-swapping may provide insights into the role of octameric M^pro in the early stage viral replication of both viruses.