The new division is headed by director Nick Stewart, who joined as head of catalogue in November 2005, and will be supported by former HMV head of music Phil Penman, who has been recruited as general manager.
Warner has declined to comment on the move, beyond a statement, which says, "In order to enhance our strategic planning and operational focus, we are incorporating under Rhino UK the Warner Music UK specialist and catalogue-based divisions, which we view to be at the core of our business."
The reorganisation comes as the major looks to rebuild its catalogue business, after falling behind the rest of its main competitors in the sector. In February, Mario Warner left the company after a six-year period in which he helped to create the WSM TV division and also ran the catalogue department.
But, in recent weeks, Warner claimed a share of around 6% of the compilations market, well behind Universal, Ministry Of Sound, EMI and Sony BMG; its highest-placed release in the compilations chart last week was WMTV's 80s Movie Hits, a collaboration with UMTV, at eight.
The performance - in contrast to the strength of Warner's success with Gnarls Barkley, Red Hot Chili Peppers and Zero 7 in recent weeks - comes against the backdrop of a troubled compilations business. May saw sales of compilations down 18.5% on the same period last year, with 1.61m units sold. Overall, sales of compilations are down 12.6% for the year to date.