Laser metal deposition with coaxial wire feeding is a directed energy deposition process in which a metal wire is fed to a laser-induced melt pool. Oxidation occurring during the process is a major challenge as it significantly influences the mechanical properties of the produced part. Therefore, an inert gas atmosphere is required in the high temperature process zone, whereby local shielding offers significant cost advantages over an inert gas chamber. In this work, a novel local shielding gas nozzle was developed based on basic methods of fluid mechanics. A gas flow-optimized prototype incorporating internal cooling channels was additively manufactured by laser-powder bed fusion and tested for its effectiveness via deposition experiments. Using the developed local shielding gas concept, an unwanted mixing with the atmosphere due to turbulence was avoided and an oxide-free deposition was achieved when processing a stainless steel ER316LSi wire. Furthermore, the effects of the shielding gas flow rate were investigated, where a negative correlation with the melt pool temperature as well as the weld bead width was demonstrated. Finally, a solid cuboid was successfully built up without oxide inclusions. Overheating of the nozzle due to reflected laser radiation could be avoided by the internal cooling system. The concept, which can be applied to most commercially available coaxial wire deposition heads, represents an important step for the economical application of laser metal deposition.