Chief Minister Siddaramaiah announced the decision in the Assembly, saying it was being done "respecting the feelings of Ravi's parents and public".
There have been state-wide protests demanding a CBI probe into the death of 35-year old D K Ravi with Opposition gunning for the Chief Minister and even the Congress central leadership nudging him.
"I have understood the feeling of Ravi's parents. I have understood the feelings of people of this state. I respect the sentiments of the people and his parents...," said Siddaramaiah, as his government came under rising pressure each day on the issue which has triggered a political firestorm.
The decision comes a week after Ravi was found hanging from a ceiling fan at his flat here on Monday last.
The government had maintained that it was prima facie a case of suicide even as the Opposition questioning the "haste" in declaring it so, and handed over the case to Criminal Investigation Department.
"We believe in people's power. We believe in respecting public sentiments," said the Chief Minister, who said he had initially thought of placing the CID report today but was not doing so following a High Court order.
The family of Ravi, who had made a mark as a bold officer and taken on the sand and land mafia besides crackdown on tax evaders, had suspected foul play and demanded an inquiry by the central agency.
Ravi's family welcomed the government's decision and said they would cooperate with the CBI.
"Ravi is not a person who will commit suicide...CBI has to investigate from all the angles to bring out the truth. Our family and Ravi's family will completely cooperate with CBI," the officer's father-in-law Hanumantharayappa said.
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