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Kerala Governor Arif Mohammad Khan administered the oath of office to Rajesh, 51, at the Raj Bhavan at 11 am.
Chief Minister Pinarayi Vijayan, his cabinet colleagues and Leader of Opposition in the State Assembly V D Satheesan were present at the function.
His portfolios will be announced later in the day.
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Rajesh had on Saturday tendered his resignation from the post of the Speaker after the ruling CPI(M) decided to appoint him as a minister in the government.
The CPI(M) had last week announced the resignation of the party’s newly appointed state secretary M V Govindan from the cabinet.
Rajesh would be replaced as Speaker of the House by party state committee member and Thalassery MLA A N Shamseer.
The minor reshuffle in the government effected in the wake of Govindan’s resignation after he was appointed as CPI(M) state secretary a week ago, replacing ailing senior party leader Kodiyeri Balakrishnan.