The local government approved Vitaly Kaloyev as deputy construction and architecture minister following a nomination by the North Ossetian prime minister.
Kaloyev lost his wife and two children in an air crash over southern Germany in 2002. In February 2004, he stabbed to death the only air traffic controller on duty at the time of the accident, Switzerland's Peter Nielsen.
On the night of July 1, 2002, a Russian Bashkirian Airlines passenger plane collided with a DHL cargo aircraft over southern Germany in airspace controlled by Swiss air traffic control company Skyguide, killing 71 people, including 45 children.
Last year four employees of Skyguide were found guilty of criminal negligence leading to the crash.
Kaloyev was released by Swiss authorities in November last year for good behavior, having served more than two-thirds of his five-year sentence. Two of the court's five judges contested the early release.
After being released he returned to Russia and received a hero's welcome in both Moscow and his home province.