I have a Windows Server 2012 R2 (AD, DNS, DHCP, IIS). MY internet connection is 10 0Mbps Up, 10 Mbps Down.
Whenever I transfer files between computers in my local network it transfers via internet at 10 Mbps.
My question is how can I direct internal traffic via LAN (1Gbps) and external via Internet (1Mpbs)?
I have a feeling that you are making the assumption that your traffic destined for another node on your LAN is being routed to the WAN based on the transfer speed alone.
Please open cmd.exe and run tracert on one of the hosts you're experiencing slow speeds with. If the name of the second computer is node1, just type tracert node1. This will show you the hops in between the nodes. If the results of this command do not show any IP addressed outside of your LAN's subnet, then you are not leaving the local network when these hosts are communicating. In this case, you may have poor quality cabling, a really...really old switch, or a router whose interface is set explicitly to 10 mbps speeds. I'm making some educated guesses because you haven't provided much detail here.
I highly, highly believe that your tracert results will not show anything outside of your LAN, but if it does you have a routing issue. This isn't something that would normally happen; someone would have to explicitly set routes for intra-LAN traffic which is unusual.
If you show us a simple network diagram and explain how these nodes are connected (what kind of switches, routers if applicable, etc) we can help you a lot more.
Edit:
Okay, so if you're only getting 10 megabits out of the network you need to figure out what the bottleneck is. This is a wireless router but you indicated your hosts are wired. Look at the NIC settings in Windows and also the NIC settings within the router's administration page. Are the NIC speeds set to auto? Look at the blinking lights on the interfaces themselves to quickly determine current speed.
I suppose you could have a cabling issue - what kind of ethernet cables are you using? Cat 5e or better I hope.
Disk I/O is very often a speed bottle neck when transfering large files across a gigabit network but I doubt that's your problem since your speeds are so low. If you were maxing out at 90 or 100 Mbps I might suggest looking into this first.
Good luck with troubleshooting.
