Ms Khare will be the state's managing director of Khadi in place of Renu Tiwari. Kedar Sharma, who is the Officer on Special Duty-cum-Director (Scheduled Caste Regional Development Schemes) will replace Ms Khare.
The state government initially claimed it was not the police who opened fire and admitted it only much later -- triggering more protests across the state.
Chief Minister Shivraj Singh Chouhan, who undertook a 28-hour fast for peace on Saturday and Sunday, had promised that action would be taken against the guilty.
Those instigating violence would not be spared, Mr Chouhan had also said. "Justice will be done and the culprits would be punished," he said.
While no case has been lodged yet against the police, the government has ordered an inquiry into the matter by Retired High Court judge JK Jain.
The state government had come under sharp attack from the opposition Congress over the deaths. The party has called the deaths "cold-blooded murders".
The farmers in Madhya Pradesh had started protests earlier this month, demanding better prices for their crops and a loan waiver. Mandsaur region had been the epicenter of the protests.
The Chief Minister has assured that the state will provide profitable prices to farmers. He is also believed to be considering waiving interest on farm loans, which could benefit more than six lakh farmers.