This was Suu Kyi's first meeting with a foreign official since her house arrest was extended by another 18 months earlier this week.
Webb, who arrived in Naypyidaw on Friday, is in Myanmar on the second leg of a two-week tour of the region.
The decision to meet Than Shwe has drawn criticism from dissident groups who say it will only serve to help the military rulers.
Webb is travelling with a US delegation that was due to meet the Union of Myanmar Federation of Chambers of Commerce and Industry in Yangon, a Myanmar businessman said on condition of anonymity.
Advocate of talks
Webb had called in March for direct talks between the US and Myanmar.
But last month, he said the recent trial of Suu Kyi made it difficult for Washington to pursue "meaningful relations" with Myanmar.
His meeting probably included talks on Suu Kyi, who was sentenced to another 18 months of house arrest.
A US national, John Yettaw, who triggered the trial when he swam to her lakeside home in Yangon in May, was sentenced to seven years of hard labour and imprisonment.
The convictions have been widely criticised around the world, particularly by the US government.
In an apparent result from Webb's talks with Than Shwe, officials said Myanmar would likely deport Yettaw soon and without him having to serve his sentence of seven years' hard labour and imprisonment.
"Mr Yettaw is likely to be deported after the visit by the US senator. They will not leave together," a Myanmar official said on condition of anonymity.
The White House has said Webb's visit would convey "strong" US views of good governance to Myanmar's leaders.
"We welcome Senator Webb's trip to the region, including the stop in Burma," Mike Hammer, a spokesman for the National Security Council, said, using the country's previous name.
"It is important for the Burmese leadership to hear of the strong views of American political leaders about the path it should take toward democracy, good governance, and genuine national reconciliation."
Larry Jagan, a Southeast Asia analyst, told Al Jazeera that "there is a danger in reading too much into this visit".
"We can't say there's going be a major shift in policy for the Obama administration and the Myanmar government," he said.
|Webb met General Than Shwe on Saturday in Naypyidaw, the administrative capital [AP]
"But this visit is extremely important because not even the UN envoy to Myanmar [Ibrahim Gambari] gets to see Than Shwe."
Webb is chairman of the US senate's Foreign Relations Committee's East Asia and Pacific Affairs Subcommittee.
Asked about speculation that Yettaw might be handed over to Webb, a spokesman for the US embassy in Yangon told the Associated Press said that the issue had "not been officially discussed".
However, Yettaw's lawyer, Khin Maung Oo, said he considered it unlikely.
"It is impossible that Mr Yettaw will be sent back with the visiting senator," Khin Maung Oo said.
"I think my client will finally be deported but not immediately."