The cabinet has agreed to reinstate Rear Adm Somkiat Ponprayoon as secretary-general of the Southern Border Provinces Administrative Centre (SBPAC).
The reinstatement order was approved at the cabinet meeting on Tuesday.
Rear Adm Somkiat, who is due to retire in September, will serve in the position for no more than a year.
The Secretariat of the Prime Minister had sought Rear Adm Somkiat's transfer from the SPBAC to the Prime Minister's Office as an advisory expert on Feb 28, only to seek his reinstatement a week later.
Prime Minister Prayut Chan-o-cha confirmed on Friday that Rear Adm Somkiat had been reinstated as SBPAC secretary-general, but did not give any further details about the U-turn.
Deputy Prime Minister Wissanu Krea-ngam said on Friday that the transfer order was revoked following a review while admitting that demands by local people to keep Rear Adm Somkiat in the post were also taken into consideration.
He said it would take some time to find Rear Adm Somkiat's successor, which would create a vacuum, so it was agreed that he should remain in charge until his mandatory retirement.
Mr Wissanu said the U-turn would not affect the SBPAC's work or undermine confidence.
"Don't think too much about it. We have to find an appropriate position for him because we just can't transfer an SBPAC secretary-general who has done nothing wrong to a post where there is no actual work for him. If there is a suitable post, he may be transferred," he said.
When news about Rear Adm Somkiat's transfer early this month, representatives in the deep South urged the government to reconsider.
They said he understood local problems and contributed greatly to Buddhist and Muslim communities.
Rear Adm Somkiat was appointed SBPAC secretary-general in January 2019 by the junta. The Feb 28 transfer order was to allow his reappointment by an elected government.
