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He also announced setting up of a new airport in Ayodhya, named after Lord Ram, and a medical college in the name of King Dashrath, father of Lord Ram, in the district.
Close on the heels of renaming Allahabad as Prayagraj, Uttar Pradesh Chief Minister Yogi Adityanath on Tuesday announced that Faizabad district will henceforth be known as Ayodhya.
"Ayodhya is a symbol of our 'aan, baan aur shaan' (honour, pride and prestige)" he said in the pilgrim town, about 120 km from state capital Lucknow.
"Nobody can do injustice to Ayodhya," he said, adding that the holy city is identified by Lord Ram.
Adityanath was speaking on the occasion of 'Deepotsav' on Diwali eve.
He also announced setting up of a new airport in Ayodhya, named after Lord Ram, and a medical college in the name of King Dashrath, father of Lord Ram, in the district.
A section of the crowd was also heard chanting 'Mandir ka nirman karao' (build a temple).
"Deepotsav is about starting a new tradition," Adityanath said at the event at Katha Park which was also attended by South Korean First Lady Kim Jung-sook.
Several projects, including redevelopment and beautification of 'Ram Ki Paidi' and stoppage of sewage disposal in Saryu river, were launched at the event.
Opposition parties criticised the CM for this move.
Aam Aadmi Party termed the decision as 'Tughlaqi' (autocratic) and said it should have taken people's opinion.
Taking a dig at Aditynath, senior AAP leader Sanjay Singh said the chief minister should first change his name to Ajay Singh Bisht if he is so 'fond' of changing names.
Communist Party of India general secretary S Sudhakar Reddy described it as a ploy to cover up the UP government's 'failure in governance'.
"This is BJP government's ploy to cover up its failure in governance. At the same time, the name change also reflects its anti-Muslim feelings.
"First it changed the name of Allahabad to Prayag Raj and now their move is to change the name of Faizabad because they think these are Muslim names", said Reddy.
Meanwhile, the Gujarat government on Tuesday said it was keen on rechristening Ahmedabad as Karnavati, if there were no legal hurdles.
Speaking to reporters in Gandhinagar, deputy chief minister Nitin Patel said the Bharatiya Janata Party government was willing to change Ahmedabad's name if it gets past the legal hurdles and receives required support.
"People are still having a feeling that Ahmedabad should be renamed as Karnavati. If we get required support to overcome the legal hurdles, we are always ready to change the name of the city," Patel told reporters when asked if the state government had a plan to rename India's only city having the 'World Heritage' tag.
Historically, the area around Ahmedabad has been inhabited since the 11th century, when it was known as Ashaval.
Chaulukya ruler Karna of Anhilwara (modern Patan) had waged a successful war against the Bhil king of Ashaval and established a city called Karnavati on the banks of the Sabarmati river.
Sultan Ahmed Shah in 1411 AD had laid the foundation of a new walled city near Karnavati and named it Ahmedabad after the four saints in the area by the name Ahmed.
"We can think of changing the name at an appropriate time," Patel added.
Slamming the BJP government over the issue, state unit Congress spokesperson Manish Doshi said the promise to rename Ahmedabad was just another 'poll gimmick' by the ruling party.