Walsh will work closely with GCap North's programme director Ande Macpherson and London programme director Andy Ashton to create a stronger working relationship between record labels and Xfm's three stations.
He will also take a larger role in formulating Xfm's music policy and brand identity across its London, Manchester and Scotland stations.
Nick Davidson, XFM network managing director, said: "Mike was the obvious choice for the network head of music job. He's passionate about new music, already knows the XFM brand inside and out, and having worked as a radio plugger for Parlophone, brings with him invaluable knowledge of the music industry as a whole."
Xfm said that over the next few weeks it planned to explain its new structure to major record labels, and talk specifically about how it can work more closely with artists.
Last month Graham Bryce, former managing director of GCap Media stations Xfm, Choice FM and Capital Gold, was appointed senior vice-president of SBS Radio Group in Amsterdam.
Bryce is credited with masterminding the rise of Xfm in London, and the launches in Manchester and Scotland, but left the company in October 2005 after a ten-year stint at the network that began life as Capital Radio.
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