Shaw will begin his new role on July 1 and will work alongside Lee Picton and Graham Fenton in developing the club's next generation of youngsters in the 16-19 academy.
He will combine that alongside his playing commitments as he prepares to lead the Mariners as captain in his fourth season with the club.
For the last two years, Shaw has been Head Coach of the football academy at Monkseaton High School, and he will now take on a similar role at Mariners Park.
He said: "I've been here for three years as a player and it has been an amazing journey so far with a lot of success.
"I've got to thank Lee and Graham for the faith they've shown in me.
"The fact they and the club have trusted me to come on board shows how much they think of the job I've done.
"From a personal point of view, it's a massive progression for me.
"I'm moving into what I believe is an unbelievable opportunity to be a part of the way the club is going."
Shaw will work with Picton, Fenton, Jamie Williams and Wess Brown in preparing academy players for the rigours of first-team football at Mariners Park.
He is excited about the opportunity he has been given.
He added: "When players come here at 16, it's about how close and how fast we can get them to the first-team.
"A lot of what I do will be trying to help create players that Lee and Graham want for the first-team.
"From a personal point of view, I'm going to do as much as I can to help these lads.
"Their aim should be to make it into the first-team at South Shields but as we've seen this year with Will McCamley (who joined Huddersfield Town), there are also massive opportunities for people to move up through the standards.
"I'm still developing as a coach and I've only been coaching for five years or so, but I'm also working with two of what I believe are the best coaches at this standard.
"I'm here to learn and improve myself as a coach, but my role here will be to help the lads who come through the door to get as close to the first-team as they possibly can."
Shaw is also positive about the club's move to a hybrid model at first-team level, which will include an additional two training sessions per week.
He said: "It's exciting, because when I came here at the age of 32, I effectively retired from full-time professional football.
"The fact I'll now be training full-time again means that I'm going to have to look after myself even better than I have over the last few years.
"It's such an exciting opportunity, with a team at our level giving players chances to come in and train full-time.
"That's going to hopefully make the difference on the pitch, because the players that are going to come in are going to be young, hungry lads that want to train full-time and develop as quickly as possible.
"For the older lads like myself, it's an opportunity to get fitter and perhaps extend my career even longer.
"I've always said I wanted to play until I'm 40, and could this take me to that point and maybe even beyond that?
"The biggest thing is seeing what Lee and Graham can do with the squad with that amount of time.
"I've seen what they can do with two nights, four hours a week, so for them to have those extra sessions with the lads, it will be really exciting to see what the team could do when they've got that amount and that level of training behind them."