Chief Minister Oommen Chandy announced after a special cabinet meeting here that the Crime Branch of Kerala Police would also investigate the disaster at the Puttingal Devi temple in Peravur town.
The accident also injured over 350 people, many in critical condition.
Asked if fireworks ceremonies in temples would be banned, Chandy said it would not be practical to ban events associated with religious institutions.
"Many see these events emotionally as it is part of their culture and traditions. I don't think a ban is a practical way out.
"Instead, the best way is to bring about very strict guidelines and control events like this to see that safety is not compromised," the chief minister said.
"This incident should open the eyes of all of us and everyone should cooperate with the guidelines to be worked out," he said.
The judicial probe would be conducted by retired high court judge Krishnan Nair and Additional Chief Secretary (Home) Nalini Netto.
"The judicial probe has been given a time of six months. Simultaneously, Additional Director General of Police Anantha Krishnan will head the Crime Branch probe," said Chandy.
He announced a compensation of Rs.10 lakh each to the families of the dead, Rs.2 lakh to those seriously injured and Rs.50,000 to those who have suffered minor injuries.
The state government will bear the expenses of medical treatment of the injured, he said.
Meanwhile, police took into custody five staff members of the contractor Surendran and his son Umesh who were responsible for the fireworks display.
Surendran and Umesh are both admitted in the Thiruvananthapuram Medical College Hospital. Surendran is in serious condition while Umesh has suffered 50 percent burns. (IANS)