He was given oath of office by Tamil Nadu Governor C. Vidyasagar Rao soon after the news of her demise broke at 12.13 a.m. on Tuesday at the Raj Bhavan.
Paneerselvam broke down during the oath taking ceremony, .
Earlier, according to reports several AIADMK MLAs were called to the Apollo Hospitals one by one, where they were asked to sign a declaration, making Panneerselvam successor to Jayalalithaa.
Panneerselvam is considered to be one of the most reliable men of Jayalalithaa and had served as the chief minister when she stepped down for the trial in the disproportionate assets case.
Panneerselvam resigned as the chief minister on May 22, 2015 paving way for Jayalalithaa to again sworn in as chief minister after the Karnataka High Court acquitted her in the case on May 11 2015.
Jayalalithaa's body will be kept at Rajaji Hall for people to pay last respects.
The Tamil Nadu government has declared a three-day holiday for schools and colleges. (ANI)