He takes up the post on 26 October, the party said in a brief announcement on its website. His role, which is the top comms job in the party, includes dual responsibility for both the party itself, and the office of its leader Jeremy Corbyn.
The Labour statement says that he joins "on leave from The Guardian", but a member of the party's press team told PRWeek it could not elaborate on what that meant.
A former comment and labour editor at the newspaper, Milne previously worked for The Economist, and has written books about topics including miners' strikes, global politics and economics. He also spent ten years as an executive member of the National Union of Journalists.
The appointment has raised eyebrows in some quarters, with comment pieces in both The Telegraph and Independent attacking Milne. Tom Harris in The Telegraph said it showed Corbyn's "utter contempt for real Labour voters", and went on to say: "Real Labour voters read tabloids, love the Queen and join the Army. They don't relate to Guardianista apologias for terrorism."