Preston is a New York newspaper veteran with 25 years' experience and former Times regional editor.
Her role will entail working closely with the Times newsroom, its editors, reporters and bloggers to help them use social media to find sources, contacts and information, to gather and break news, and above all, get tweeting.
The Times said Preston will encourage staff to engage readers on a number of social media platforms, such as Facebook, YouTube, Flickr and Digg.
In an internal staff memo, the Times said: "[An] awful lot of people are finding our work not by coming to our homepage or looking at our newspaper but through alerts and recommendations from their friends and colleagues.
"So we ought to learn how to reach those people effectively and serve them well."
The social media editor has been busy on Twitter since signing up, her first Tweet reading: "Hi, I'm the NYT's new social media editor. More details later. How should @nytimes be using Twitter?"
So far Preston has amassed over 2,500 followers and has been busy talking back and forth with them, exchanging a number of suggestions.
However, the Times newsroom is no slouch when it comes to Twitter, the company publishes over 100 Twitter feeds, many on a personal and anecdotal level such as the posts from media reporter Brian Stelter.
The Times also recently launched a Digg-like TimesWire, a real-time streaming feed of news stories that updates every minute.
The role of the social media editor will also include a small amount of policing, or making sure newsroom staff are not damaging the paper's reputation online.
Preston's appointment comes days after Times staff were lambasted for discussing details of a closed door editorial meeting on Twitter.
The Times' liberal adoption of social networking has differed from some of its competitor's ideologies, such as Bloomberg, which has severely cracked down on its employees' activities online.
Earlier this month, Rupert Murdoch's Wall Street Journal sent its employees a strict set of guidelines for using sites like Twitter or blogs.