The meeting considered the recommendations of the Karnataka State Minority Commission amid reports of division among ministers and discordant notes from seers of the community on the issue.
Lingayats/Veerashaivas, estimated to form 17 per cent of the state population, are considered the Bharatiya Janata Party's traditional voter base.
The move is seen as an attempt by chief minister Siddaramaiah to wean away a section of them towards the Congress, though the BJP maintains it would backfire badly.
"After due deliberations and some discussions on concerns of various sections of society, the cabinet has decided to accept the recommendations of the Karnataka State Minority Commission," Law Minister T B Jayachandra said.
He said the commission, based on the report of an expert committee, has recommended considering grant of recognition as religious minority to the Linagayat and Veerashaiva Lingayats (Believers of Basava Tatva (philosophy) under section 2 (d) of the Karnataka State Minorities Act.
"It was also decided to forward the same to the central government for notifying under Section 2(c) of the Central Minority Commission Act," he told reporters.
A divided house, the cabinet has finally come to a decision on the issue after deferring it at least twice.
The demand for a separate religion tag to Veerashaiva/Lingayat faiths has surfaced from the numerically strong and politically influential community, amid resentment from within over projecting the two communities as
the same.
One section led by Akhila Bharata Veerashaiva Mahasabha has asserted that Veerashaiva and Lingayats are the same and religious status be given to them.
The other group wants it only for Lingayats as they believe that Veerashaivas are one among the seven sects of Shaivas, which is part of Hinduism.
Of late, some Lingayats have also stated that they were open to having the Veerashaivas under their umbrella, but that Lingayat nomenclature was non-negotiable.
The KSMC had formed a seven-member committee, headed by retired high court Judge H N Nagamohan Das in December last year that submitted its report on March 2.
The committee in its report has said "Lingayats in Karnataka may be considered as religious minority."
"Veerashaivas, who consider Basavanna as Dharma Guru, vachanas as sacred text, wear Ishta Linga, and believe and follow Vachana tatva, may be considered as part of Lingayats," it said.
The committee had earlier sought six months to submit its report, stating it cannot complete work in the four weeks time that the government had given.
Opposition voices have alleged that the committee has toed the government line by submitting the report much before the time it had sought for.
Jayachandra said the decision would not affect the rights and interests enjoyed by the existing minorities.
He pointed out that the commission while forwarding the report of the committee has also recommended that the government decision should not affect the existing and other benefits to the other religious or linguistic minorities.
"The acceptance of the recommendation was in terms of the opinion of the minority commission that proper recognition is to be made to Lingayats and Veerashaiva Lingayats (believers of Basava Tatva).
"It would also be in terms of the said opinion of the commission and, also subject to the condition that such recognition would not affect the rights and interests of other minorities in the state," he said.
The 'effective date' of the notification would be, as may be notified by the state government, after meeting the procedural requirements, the minister said.
It would also be after taking note of the possible impact of such grant of recognition to other minorities or the non-minorities or the public at large, he added.
Asked about the nomenclature -- whether the recommendation will be Lingayat or Veerashaiva Lingayat -- Jayachandra said, "....the cabinet has accepted the recommendations of the Nagamohan Das committee."
According to reports, there were heated arguments during the cabinet meeting between ministers belonging to both Lingayat and Veerashaiva camps, with both sides sticking to their stand.
However, Jayachandra rubbished it and said "it was a unanimous decision; there is no question of opposition."
The Veerashaiva/Lingayat community that owes allegiance to the 12th century "social reform movement" initiated by Basaveshwara has a substantial population in Karnataka, especially in the northern parts of the state.
Slamming the decision, Opposition BJP leader in the assembly Jagadish Shettar said the Siddaramaiah government was dividing the society for the sake of politics, keeping the election in mind and accused it of "igniting fire."
"The decision will boomerang on them," he said.
He also alleged that the Nagamohan Das committee, a government sponsored panel, was pressured to submit the report early ahead of the elections.
Shettar said the Siddaramaiah government was trying to shift the issue to the Centre.
"This is just a drama. People will give them a befitting reply," he added.
Sri Veera Someshwara Shivacharya Swami of Rambhapuri Peetha of Balehonnur, one of the seers heading the Veerashaiva camps, condemned the cabinet decision.
He alleged that the recommendation may have got accepted following the "conspiracy of a few people," but that Veerashaivas together will fight against it and are planning legal recourse.
"The chief minister and others will have to face the disgrace of dividing the community. People will teach them a lesson," he added.
Why Siddaramaiah and the Congress are sinking in Karnataka
JD-S holds key to Congress's 2nd term in Karnataka
Has language war put BJP on back foot in Karnataka?
Yes, Rahul can, and Rahul must!
Is Karnataka India's most corrupt state?