The new Kra Daadi district with headquarters at Jamin was created bifurcating the present Kurung Kumey district.
The cabinet chaired by Chief Minister Nabam Tuki cleared creation of the district on Sunday.
Earlier, the cabinet on January 13 approved creation of four new districts.
The district creation bill is likely to be tabled in the coming budget session of the Assembly.
The cabinet also approved in principle establishment of All Women Police Station in the state capital, the release said.
Besides, it approved in principle creation of 18 cells on crime against women in 17 district headquarters and one in Police Headquarters at Itanagar.
Tuki had announced creation of all women police station here in his vision document for the year 2013.
The cabinet also approved in principle creation of one police outpost at Kheel in Papum pare district, the statement added.