At the state cabinet meet, chaired by chief minister Devendra Fadnavis, it was decided to suggest Deo's name as the next AG, a senior official said.
The stepping down of Shreehari Aney in March had left the post vacant since then.
The government had recently informed the Bombay High Court that an A-G would be appointed on or before December 30. The state had filed an affidavit on December 13 saying that the post will be filled by the end of the month.
The petition urged the court to direct the State to appoint an A-G under Article 165 of the Constitution. The petition also sought that the post, which has been held by Deo since June 17 this year, be declared unconstitutional as it is not in accordance with the same Article.
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The court had criticised the State for not complying with the deadline of December 23 and had adjourned the matter to January 9.
It had earlier observed that constitutional and statutory functions are suffering due to the non-appointment of the A-G and has hurt the cause of justice.
(Reopens BES9)
Reacting to the state Cabinet's decision to recommend Deo's name for the post of Advocate General, Congress MLC Sanjay Dutt claimed that after he moved the high court, the government took a decision on the issue.
He said in a tweet that, "the government has conceded my demand and finally appointed Acting AG as AG."
"Maharashtra Chief Minister speaks of good governance but his indecisiveness reflects lack of governance!. If acting AG Rohit Deo only was to be made the AG, why the government had waited for 280 days?" he asked in another tweet.