There have been allegations that innocent villagers, including women and children, were among those slain.
The decision to order judicial probe was taken at the Cabinet meeting here this evening, a government spokesperson said.
A sitting judge of Chhattisgarh High Court would probe the encounter that took place near Basaguda in Bijapur district on the intervening night of June 28 and 29. It was a joint operation of CRPF and state police.
Earlier, the state government had ordered only a magisterial probe.
Apart from the issue of genuineness of the encounter, the judicial probe would also look into whether the security forces had made necessary preparations before going into the area, and whether the encounter could have been averted.
Official sources quoted Chief Minister Raman Singh as saying that there was no pressure for having a judicial probe.
"The state government wants a free and fair investigation to clear the confusion prevailing at the state and national level over the encounter," he said.
