Stone, a veteran of almost 30 years experience as an assistant coach in varying capacities, was a key member of Demons senior coach Paul Roos' panel at the Swans from 2005-09, before serving under current Swans coach John Longmire.
Stone was also an assistant coach at Hawthorn from 1984 to 1997, including four premierships in six years from 1986-91.
In all, he has been involved in six premierships from nine Grand Finals during his coaching career.
In 2013, Stone received a lifetime achievement award for his contribution to the game.
Melbourne football manager Josh Mahoney said Stone, who was most recently a development coach at the Swans, would play a key role as the Demons looked to develop their younger players.
"George has a proven track record in developing quality AFL players at both Hawthorn and the Sydney Swans," he said.
"His experience will be invaluable for our players and coaches as we look to improve as a club.
"George will work closely with our midfielders, with particular focus on their game education and running patterns.
"George has worked previously with Paul Roos at the Swans and knows intimately the way that Paul wants to play, which clearly is an advantage for the Melbourne Football Club, as it allows us to hit the ground running from day one of pre-season training."
