It is not the first time Munster have promoted a former player to their backroom staff.
Most recently, former Australian international and Munster captain Jim Williams, who ended his playing days in 2005, successfully took on the mantle of forwards coach with the 2006 European champions.
Payne will be Munster's full-time team manager with Jerry Holland remaining on in an advisory capacity. The former Natal Shark is to continue his playing career with AIB League club UL Bohemians.
Munster coach Declan Kidney has confirmed an extended 35-man squad for the coming season, mindful of the fact that at least ten of his frontline players will miss the first weeks of the campaign due to their Rugby World Cup involvement.
Munster's squad includes centre Kieran Lewis and flanker Niall Ronan, who were both signed from Leinster, and former Connacht out-half Paul Warwick.
Meanwhile, Kidney is on the verge of sealing the signing of Rua Tipoki, the highly-rated New Zealand Maori captain.
The 31-year-old centre, who skippered the Maori during the recent Churchill Cup tournament, will link up with Munster subject to him receiving medical clearance and obtaining a work permit.
Tipoki partnered Luke McAlister at centre when the Maori defeated the British & Irish Lions in 2005, and has captained two Air New Zealand Cup provinces to Ranfurly Shield glory - Bay of Plenty in 2004 and North Harbour in 2006.
He has had stints playing Super 14 rugby for Otago Highlanders, Auckland Blues and more recently the Canterbury Crusaders.
MUNSTER RUGBY - 2007/08 SEASON:
Players Outgoing: Frank Roche, Christian Cullen, Tim McGann, Trevor Halstead, Eoghan Hickey, Chris Delooze, Shane O'Connor, Brian O'Meara, Diogo Mateus, Ross Noonan.
Munster Squad: Forwards - Tony Buckley, Marcus Horan, Darragh Hurley, John Hayes, Eugene McGovern, Federico Pucciariello, Denis Fogarty, Jerry Flannery, Frank Sheahan, Paul O'Connell, Donncha O'Callaghan, Mick O'Driscoll, Donnacha Ryan, Chris Wyatt, James Coughlan, Anthony Foley, Denis Leamy, John O'Sullivan, Alan Quinlan, Niall Ronan, David Wallace.
Backs - Brian Carney, Ian Dowling, Anthony Horgan, John Kelly, Kieran Lewis, Mossy Lawlor, Barry Murphy, Jeremy Manning, Ronan Oâ00Gara, Tomas O'Leary, Lifeimi Mafi, Peter Stringer, Paul Warwick.
Development Contracts: Denis Hurley, Gerry Hurley, Tom Gleeson, Keith Earls, Ciaran O'Boyle, Mark Lelbourne, Timmy Ryan,
Declan Kidney - Coach
Jim Williams - Forwards Coach
Tony McGahan - Skills/Defence/Backs Coach
Shaun Payne - Team Manager