A 2-axis hybrid positioning system was developed for precision contouring on micro-milling operation. The system was developed to overcome the micro-positioning limitations of conventional linear stage positioning system on machine tools. A 2-axis flexure hinge type piezoelectric stage was added on a standard milling machine to obtain better machining results. The control method used for the hybrid system was active error compensation type, where errors from linear stages are cancelled by the piezoelectric stage motion. Positioning experiments showed an improvement of machine accuracy which was confirmed by the machining results. A micro-pillar was fabricated for the validation of long-range and high-precision contouring capability. The system was successfully implemented on micro-milling machining to achieve high-precision machining results.