Palaniswami is the third person to occupy the top post in the last nine months.
Governor C Vidyasagar Rao administered the oath of office and secrecy to 63-year-old Palaniswami, a party veteran from western Tamil Nadu, at the head of a 31-member Cabinet at a ceremony in the Raj Bhavan this evening.
The ministers were sworn-in in batches.
Palaniswami is the third AIADMK leader to be sworn-in as Chief Minister in the last nine months. AIDMK supremo and Chief Minister J Jayalalithaa had powered the party to a rare successive term in office in the state in the May, 2016 Assembly Polls. She continued in the post through her grim 74-day battle for life.
Panneerselvam later stepped down, paving the way for Sasikala, who was already chosen AIADMK general secretary, to be elected its legislature party leader on February five.
However, the usually reticent Man Friday of Jayalalithaa rose in rebellion against Sasikala two days later, claiming he was coerced into resigning. He even expressed willingness to become Chief Minister again if the people of Tamil Nadu and AIADMK workers so desired.
Amid the face off with Panneerselvam, Sasikala met Governor Rao on February 9 and staked claim to form the government.
Notwithstanding criticism from several quarters, Rao preferred to wait and watch as the political tug-of-war played out between the rival AIADMK factions.
He stood vindicated when Sasikala and two members of her family were convicted and their sentences restored by the Supreme Court in a disproportionate assets case on February 14, rendering her ineligible for contesting elections for 10 years and dashing her hopes of becoming the Chief Minister.
Sasikala then handpicked her loyalist Palaniswami, who was elected AIADMK legislature party leader, and staked claim to form the government on Tuesday.
Later, Palaniswami visited the memorials of party founder M G Ramachandran and Jayalalithaa where he paid floral tributes.
As a mark of reverence, Palaniswami prostrated at Jayalalithaa's memorial on the marina.
He was accompanied among others by AIADMK deputy general secretary T T V Dinakaran, who is a nephew of Sasikala.
Before heading for a Karnataka prison where she would serve the remainder of her jail term, Sasikala had reinducted Dinakaran into the party, five years after Jayalalithaa had expelled him. Sasikala also appointed Dinakaran as her deputy, virtually handing over the party's control to him in her absence.
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