Finance Minister D Jayakumar, who also holds the Fisheries portfolio, said retrieval of Katchatheevu was the "topmost agenda" of the state government.
"Retrieval of Katchatheevu back to India and restoration of the traditional fishing rights of Indian fishermen in the Palk Bay area are the topmost agenda of the government of Tamil Nadu," he told the state Assembly.
Recalling that former Chief Minister J Jayalalithaa had in her personal capacity moved the Supreme Court for retrieval of the islet, he said the state government had later impleaded itself in the case.
He also referred to the Assembly passing a unanimous resolution "questioning" the legal validity of the two agreements of 1974 and 1976 by which the islet was ceded to the island nation.
Further, Jayalalithaa had taken up the matter in her meetings with Prime Minister Narendra Modi, he added.
"Retrieval of Katchatheevu is the only solution for the fishermen's issue," he said.
"The government reiterates its consistent stand that a permanent solution to the vexatious problem faced by our fishermen will be possible only by restoring India's sovereignty over Katchatheevu, thereby restoring their rights to fish in their traditional waters," he added.
Meanwhile, DMK deputy leader Durai Murugan said that the then Indira Gandhi government had ceded the islet without the knowledge of DMK chief M Karunanidhi, who was Chief Minister then.
However, Karunanidhi had later taken up the matter with the Centre and also moved a resolution in the state Assembly reiterating that the islet belonged to India, he said.