The decision has been communicated to the Punjab and Chandigarh administration, said sources, adding the remission order will be pursued by the Chandigarh administration.
Rajoana, 52, who is currently lodged in Patiala Central Jail, is the prime accused in the case and he will now serve life imprisonment.
A former Punjab Police constable, Rajoana was sentenced to death on August 1, 2007 by a special Central Bureau of Investigation (CBI) court in Chandigarh and his execution was scheduled for March 31, 2012.
The Home Ministry in September this year had approved the commutation of Rajoana's death sentence to a life term as a humanitarian gesture ahead of the 550th birth anniversary of Sikhism founder Guru Nanak Dev, a decision which was criticised by Beant Singh's grandson Ravneet Singh Bittu.
Besides Rajoana, the Home Ministry had granted a special dispensation to eight other Sikh prisoners from various jails in the country on the occassion.
On March 28, 2012, the Home Ministry had stayed Rajoana's execution following clemency appeals filed by the Shiromani Gurdwara Parbandhak Committee.
Beant Singh and 16 others were killed in an explosion outside the Civil Secretariat in Chandigarh on August 31, 1995.
Dilawar Singh, a Punjab Police officer, had acted as a suicide bomber to assassinate Beant Singh.
Rajoana was the second human bomb in case Dilawar Singh would have failed to kill the Congress leader.
Rajoana had cited the 1984 anti-Sikh riots as the reason behind the killing of Beant Singh.
( With inputs from IANS )