Milne was first elected to the Tasmanian House of Assembly in 1989 as a member of the Tasmanian Greens in the electorate of Lyons, one of five Green politicians elected at that election. She was part of the Labor–Green Accord, a political agreement between the Australian Labor Party (ALP) and the Tasmanian Greens to form government after the 1989 general election had resulted in a hung parliament. When Bob Brown stood down in 1993 to contest the federal election, she became leader of the Greens in the Tasmanian Parliament and the first female leader of a political party in Tasmania.