He replaces outgoing editor Iain Hepburn. STV would not comment on the circumstances surrounding Hepburn's departure, just that he is "not with the company anymore".
Milne joined STV in Feburary this year as regional editor in Edinburgh. He joined from Deadline News, where he was consulting managing editor. He was previously associate news editor at Daily Record and assistant editor at Scottish Daily Mirror.
He will oversee the editorial content of all STV Local community sites.
Milne said: "It's a privilege to be given the chance to play such a key role in helping shape what is one of Europe's most exciting digital media projects and to build on the great work of the talented team and communities involved so far.
"It is a fantastic opportunity for me personally and for all those lucky enough to work on STV Local at such an exciting time in its evolution, and I look forward to both the challenges and opportunities to come on the journey ahead."
David Milne, executive editor of STV Local (no relation), said: "I'm delighted that Shaun has been appointed editor and I am confident he will do a fantastic job in his new role.
"Shaun has made a tremendous contribution as regional editor for Edinburgh and his passion, experience and ideas will now be focussed on growing our audience by delivering even better content and services to the communities we serve."
Hepburn, who is a former digital editor at the Daily Record and Sunday Mail titles, says on his website that he is "leaving to pursue other opportunities".
The Local network launched in September last year, and has since rolled out 22 sites in six local authority areas across Scotland – North Lanarkshire, South Lanarkshire, Aberdeen City, Aberdeenshire, Moray and Edinburgh.
The network is preparing to launch in Glasgow and is currently looking for an editor for the new site.
STV said in February that the Local network had made an "excellent start".
Announcing financial results for last year, the broadcaster said it had aimed for 1.7 million average monthly unique users across all its sites last year – and it claimed to have received 2.2 million. It has now set a goal of 2.5 million in 2011 and three million in 2012.
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