State Home Minister R R Patil signed orders to this effect today, Home department officials said.
The file related to his appointment now awaits a formal approval from Chief Minister Prithviraj Chavan, they said.
Yadav, who won the gold medal at the 2010 Commonwealth Games, is now in London as part of the Indian Olympics' team.
Patil had taken the initiative of honouring Yadav earlier but the concerned file was gutted in the Mantralaya blaze last month, the officials said.
Besides, Pankaj Shirsat, who was captain of Indian Kabaddi team, will also be made DSP, they said.
