"Chinnamma all set to become the Next Chief Minister of Tamil Nadu," AIADMK said in a tweet.
Panneerselvam proposed her name at the meeting of AIADMK legislators, party leaders said. "I resigned and we elected Sasikala unanimously as leader of the party in assembly. All MLAs are in support," said Panneerselvam.
Earlier, Panneerselvam and other ministers met Sasikala at the Poes Garden residence of late Chief Minister J. Jayalalithaa where Sasikala continues to live.
The AIADMK legislators had not been informed about the agenda of the meeting.
The meeting was called a day after Sasikala appointed some former ministers and others who were earlier shunted out by Jayalalithaa to various party posts.