The ban reportedly encompasses nearly all political and government employees, except five - the Chief Justice of India (CJI), the President, the Vice-President and the Lok Sabha speaker.
The decision will come into effect from May 1, 2017.
Meanwhile, Chief Minister Pema Khandu today hailed the decision of the Union Cabinet under the leadership of Prime Minister Narendra Modi to do away with "VIP culture" by banning use of red beacons in any kind of vehicles in the country.
In the past months the newly elected chief ministers of Punjab and Uttar Pradesh banned the beacons for state officials.
The VIP culture of flaunting red beacons on official vehicles will be history from May 1, and there will be absolutely no exceptions, the government announced on Wednesday.
Earlier, the Supreme Court of India had asked all state governments to restrict the list of VIPs who are allowed beacons on their vehicles.
He recalled late Ms Jayalalithaa had not used the red beacon light as Chief Minister.
"It will be allowed only on emergency service vehicles from May 1 to end VIP culture", Gadkari said, before becoming the first minister to dismantle the red beacon from his auto.
Palaniswami himself personally removed the beacon light from his vehicle at the State Secretariat. This will mean that only emergency services can use blue flashing lights.
At present, rule 108 of the Central Motor Vehicle Rules, 1989 allows the use of red beacons atop the vehicles of VVIPs, or dignitaries notified by the State or Centre. Also, in Punjab under the rule of the previous government, Shiromani Akali Dal leaders at all levels, leaders of local bodies, even candidates who lost the Assembly elections, appropriated the red beacon.
The decision is a democratic one, ' adding that "The step is bound to increase faith and respect of the common mass in the Modi government".
Delhi chief minister Arvind Kejriwal took the lead in 2015 by asserting he would not have the red beacon on his auto.
In private conversations - in the middle of preparations to join the chief minister on her north Bengal trip starting April 23 - many officials wondered if this move was for real.