The appointment comes days ahead of the January 8 session of the assembly, which will start with the customary Governor's address.
A brief statement from K Boopathy, Secretary, Tamil Nadu Legislative Assembly (TNLA), said Panneerselvam has been appointed as the Leader of the House.
Sengottaiyan, also a veteran AIADMK leader, was appointed as Leader of the House in February 2017 following a split in the ruling party spurred by a rebellion by Panneerselvam against the then party chief Sasikala, now undergoing a prison term in a corruption case.
However, days after Sasikala staked claim to be sworn in as chief minister, the Supreme Court on February 14 convicted her in the disproportionate assets case following which K Palaniswami was picked by her to head the AIADMK government.
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Later, Palaniswami also revolted against Sasikala and her family and the factions led by him and Panneerselvam merged in August last year.
The assembly will meet for the first time next week following the disqualification of 18 AIADMK MLAs supporting sidelined party leader TTV Dhinakaran, who will be making his debut as a member of the house during the session.