The Rajasthan government on Friday night announced a Central Bureau of Investigation probe into the community clash in Bharatpur's Gopalgarh village which left eight people dead.
A high-level meeting chaired by Chief Minister Ashok Gehlot decided to hand over the case to the CBI.
At the same time, a judicial inquiry by a retired high court judge will be conducted into the incident, officials said.
Bharatpur District Collector Krishna Kunal and Superintendent of Police Inglaj Dan have been suspended, they said.
Gehlot also announced compensation to the victims and government job to one family member each of those died in the clash.
Eight people were killed and 21 others injured on Wednesday in a clash between two communities over a land dispute at Gopalgarh in Bharatpur, forcing the district authorities to impose curfew in some areas.
According to police, incorrect entry of a land meant for digging a pond as a graveyard in government records by a local patwari was the cause of the clash.
