Shah, who is an old loyalist of the Pakistan Peoples Party has twice before served as Sindh Chief Minister and also held the post in the previous government.
"Basically President Asif Zardari has rewarded Qaim for his role in the success of the PPP in the recent general elections in the province," party leader Sharjeel Memon said.
Shah, who belongs to district Khairpur, has been a PPP loyalist since the party's inception and apart from being elected as a Member of Provincial Assembly several times he has also been a Member of National Assembly and a senator.
Doubts still remain whether the Mutthaida Qaumi Movement will join the PPP government after once again dominating elections in Karachi, the financial capital of the country.
The MQM has undergone organisational restructuring after the elections with a new coordination committee announced by chief Altaf Hussain and some old members being sacked from the party.