A total of 31 other All India Anna Dravida Munnetra Kazhagam (AIADMK) MLAs were also sworn in.
According to an official in Raj Bhavan, Rao will meet Palanisamy at 7.30pm.
Palaniswami took the oath in Tamil, and the 30 ministers followed in batches. He has to prove his majority within 15 days. The fear of facing the ballot will bind the AIADMK legislators, political analysts said.
Already the people don't want BJP members in the assembly and they could reject the Sasikala supporters as well. But between 2011 and 2016, Palanisamy was one of the very few who was never dropped from the ministry. Another of Sasikala's nephew, S. Venkatesh, has also been inducted into the party, though he hasn't been given any post as of now. He has been a Jayalalithaa loyalist since the 1980s and was minister for public works, highways and minor ports in the last Cabinet. The minister for electricity, prohibition and excise could be rewarded for it, and get a bigger portfolio, barring accidents or shock developments.
The other ministers are: K. Raju, S.P. Velumani, D. Jayakumar, C.Ve.
Veteran AIADMK leader and party presidium chairman K A Sengottaiyan has been given charge of school education - it used to be with K Pandiarajan, the only minister who switched over to the Panneerselvam camp during the crisis.More news: Mayweather Tells McGregor What To Do If He Really Wants To Fight
More than 100 MLAs from the Sasikala faction, who have been lodged at Golden Bay resorts at Koovathur on the outskirts of Chennai for over a week, will finally come back to the city, pay their respects at former chief minister J. Jayalalithaa's memorial and head for the swearing-in cermony. This puts an end to her claim to be Tamil Nadu's next chief minister - she can not hold public office or contest elections for the period of her jail term and six years after that. She requested Governor Vidyasagar Rao to swear in Palanisamy as state leader as her party has the majority in the 235-strong assembly.
If Sasikala is acquitted then the governor is bound to appoint her as the chief minister and ask her to form the government.
Palaniswami, a known Sasikala loyalist and a five-time MLA, is the party's strongman from Salem district and now holds the portfolios of Highways, Public Works and Minor Ports.
Also jailed were her relatives Elavarsi and V.N. Sudhakaran.
But some legislators claimed they were being held hostage, and said they were backing Mr Panneerselvam.
Hailing from Nedungulam village in Salem district, Palaniswami belongs to the Gounder community. As a Kongu Vellala Gounder, he was instrumental in planning for elections in the western region of Tamil Nadu. All the convicted persons will have to serve the remaining part of the sentence.