(TOM GANNAM ~ Associated Press)
Payne had been the Blues' interim coach since Jan. 2, when he replaced Andy Murray. The team announced his hiring Wednesday.
The 39-year-old Payne becomes the NHL's youngest coach. He led the Blues to a 23-15-4 record after taking over for Murray, including a 12-5-2 home record after the team had the league's worst home mark for much of the season.
Blues president John Davidson said that there was no reason to wait to decide whether Payne, who was with the Blues' AHL affiliate in Peoria, Ill., for the last two seasons, or someone from outside should be considered for the position.
"You can go many different ways," Davidson said. "You can wait until July and see who's available and who's not, but when you feel confident that you've got the right person and you feel confident with the job that he did during his 42 games and how he carried himself, his family values, the whole thing, I think it was a pretty easy decision."
The Blues finished at 40-32-10, which was good for 90 points, two off their mark of a season ago when they were sixth in the Western Conference.
They finished ninth this season and missed the playoffs, going through exit meetings Wednesday.
"I'm very pleased," said Payne, who guided the Peoria Rivermen to a 62-44-3-6 record. "It gives me that added time with the players and the coaches to assess where we can really improve."
Payne was the ECHL coach of the year in 2006-07, guiding the Alaska Aces to the Kelly Cup Championship during a tenure that included three consecutive trips to the conference finals.
"He's young, he's got energy, he's got communication skills," Davidson said. "We feel really good that he's from within [the organization]. We feel real strong about that."
Payne appeared in 22 games as an NHL player with the Boston Bruins and played eight pro seasons after being chosen by Edmonton in the seventh round of the 1989 draft.
The native of Kamloops, British Columbia, is eager to get the Blues back into the playoffs.
"We want to focus on the things that didn't happen for us," said Payne, who was accompanied by his wife, Jane, and two daughters. "We want to focus on why. We want to make sure the steps that are necessary to correct. We can't be looking back at any accomplishment when we aren't one of those 16 [playoff] teams playing tonight."