The 35-year-old South African, whose professional playing career came to an end last month, is held in high regard by the Magners League side and their supporters.
Payne will be Munster's full-time team manager with Jerry Holland remaining on in an advisory capacity.
Meanwhile, coach Declan Kidney has confirmed an extended 35-man squad for the coming season, mindful of the fact that at least 10 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, both signed from Leinster, and former Connacht fly-half Paul Warwick.
Meanwhile, Kidney is on the verge of sealing the signing of highly-rated New Zealand Maori captain Rua Tipoki.
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.