Addressing a crowded press conference here, Chief Minister K Palaniswami also announced that the late AIADMK supremo's Poes Garden residence here, occupied by her till her hospitalisation last year, will be turned into a government- run memorial.
The twin announcements have virutally cleared the decks for the merger of the factions led by Palaniswami and rebel leader O Panneerselvam as they meet two of the key demands of the latter.
"Various news from various sections and forums are appearing in the media about the death of Puratchi Thalaivi Amma (Revolutionary leader as Jayalalithaa was called by her followers).
"An inquiry commission headed by retired high court judge will be set up to look into the death of 'Idhaya Deivam' (God of heart) Amma," the chief minister said.
After rebelling against the leadership of AIADMK general secretary V K Sasikala in February last, Panneerselvam, a former chief minister, had raised suspicions over the circumstances surrounding Jayalalithaa's death.
However, the Sasikala camp had been criticising Panneerselvam's demand, saying it was he who was the chief minister during Jayalalithaa's hospitalisation and would be among the first to be questioned in case of a probe.
Palaniswami's announcements come days after his camp virtually nullified the appointment of T T V Dhinkaran as AIADMK deputy general secretary.
Incidentally, Dhinakaran had only a few days ago at a public rally in Madurai made a demand for a probe into Jayalalithaa's death, seeking to take the wind out of Panneerselvam camp's sails.
Recalling that Jayalalithaa was a six-time chief minister of Tamil Nadu who finds a space in "everybody's heart," he said representations had been received to declare her Poes Garden residence "Veda Nilayam," a memorial and allow it for public viewing.
"Veda Nilayam will be turned into a government memorial and the general public will be allowed to view it," he said, adding it would enable the people to know her achievements and sacrifices for the country.
He said the Commision would complete its work within an appropriate time frame and the name of the judge will be announced later.
Panneerselvam loyalist and former Minister K P Munusamy welcomed the decision to make Poes Garden residence a memorial.
On the inquiry, he told PTI that they had actually demanded a CBI probe, though it was the chief minister's view to have a Commission of Inquiry.
Asked if the prospects for merger have now brigthened, he said, "as far as merger goes, it can happen only if Sasikala and her family are fully ousted (expelled) from the party."
He said the family, up to "usurp," the party should be shown the door.
AIADMK leader P H Pandian, now Panneerselvam loyalist had raised several suspicions over Jayalalithaa's death in February.
He alleged that there was a quarrel at Jayalalithaa's Poes Garden home during which she was "pushed down" and collapsed.
Pandian, a former state assembly Speaker, said he suspected foul play, alleging that her demise occurred under "unnatural" circumstances and demanded a probe on her hospitalisation.
Jayalalithaa was admitted to Apollo hospital here on September 22 and passed away on December 5 after battling for 75 days.
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