Piyasena Gamage, 68, a member of parliament from the Southern province's Galle district, sworn in as the State Minister of Law and Order and Southern Development.
There was speculation that President Sirisena's Sri Lanka Freedom Party (SLFP) may leave the current unity government with Prime Minister Ranil Wickremesinghe's United National Party (UNP) by December 31.
However, Gamage's appointment has put the speculation to rest with analysts believing that the SLFP will not leave the government.
The Rajapaksa faction has floated a new party to contest the February 10 local-level polls for 341 councils.
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This would be the first test for the unity government, particularly for the UNP which dominants the ruling coalition.
Sirisena's faction has been accused by Rajapaksa's faction of delaying the elections out of fear of losing them.
The government said it postponed the elections since 2015 for electoral reforms.