The government also reconstituted the board appointing nine others as members including BJP leader Vani Tripathi Tikoo and filmmakers Ashoke Pandit and Chandra Prakash Dwivedi.
An official statement said that Mr Nihalani was appointed as chairperson of the Central Board of Film Certification (CBFC) in an honorary capacity for a period of three years or until further orders, whichever is earlier.
Other eminent persons who have been named as members are film writer Mihir Bhuta, Syed Abdul Bari, Ramesh Patange, actor George Baker, actor-filmmaker Jeevitha and actor- playwright S Ve Shekhar.
After Ms Samson resigned last week, all members of the CBFC had also put in their papers.
The government had strongly rebutted the charges levelled by Ms Samson with I&B minister Arun Jaitley asserting that it maintains an arm's length distance from the film certification process.
Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.