Mr Panneerselvam said when he was chief minister, he had written to Prime Minister Narendra Modi in January seeking the coin and a special postal stamp on MGR - as Mr Ramachandran was known by his supporters - to commemorate his birth centenary being celebrated this year.
"Heeding my request, the Union Finance Ministry has sent me a letter on July 17 saying the central government has decided to issue a commemorative coin on the occasion of the birth centenary of Puratchi Thalaivar," Mr Panneerselvam said in a statement.
The former chief minister, heading the AIADMK Puratchi Thalaivi Amma faction, also thanked PM Modi for the centre's decision to issue the coin. The central government had in January itself accepted to issue the special stamp.
Born on January 17, 1917, MG Ramachandran, who founded the AIADMK in 1972, was Chief Minister of Tamil Nadu between 1977 and 1987.
Mr Panneerselvam said he told PM Modi that Mr Ramachandran was an "inspirational figure" remembered for his "magnanimity, generosity, commanding leadership and determination to fight for the legitimate rights of the states."
He had said it would be a "fitting tribute" to honour the Bharat Ratna recipient with a coin and stamp on the occasion. The six-month long centenary celebrations of MGR was inaugurated by Mr Panneerselvam's successor K Palaniswami on June 30 in Madurai.
The events will culminate in a "grand celebration" scheduled in Chennai in January next year.