The federal government has agreed to set up the International Institute of Classical Tamil Language in the state capital Chennai, where language politics have often boiled over.
M. Karunanidhi told reporters late Tuesday the government had also agreed to several more demands to promote Tamil, including setting up international Tamil prizes and awards for scholars and experts.
"These steps will ensure that Tamil gets its due recognition and incentives that have been available for North Indian languages," Karunanidhi said.
Federal government efforts to impose Hindi -- a north Indian language from the Indo-Aryan group -- in the Dravidian south sparked violence.
Madras state was created in 1956 along linguistic boundaries and renamed Tamil Nadu in 1965.
Demand for equal status for Tamil with the national language Hindi is a common political slogan.
More than 62 million people live in Tamil Nadu and Tamil is also spoken in Sri Lanka and Indian communities spread through Malaysia, Sing