The award-winning director has been wanted in the US for decades after admitting to sex with a minor.
Mr Polanski, now 83, fled ahead of his sentencing for statutory rape in 1978.
The Cesars have defended their choice, praising the director as an "insatiable aesthete".
His role in the 2017 awards has outraged women right`s groups, who have called for a boycott of next month`s televised ceremony.
The minister, Laurence Rossignol, told France Culture radio she found it "surprising and shocking that a rape case counts for little in the life of a man".
`An insult to women`
However, a statement from the French Academy of Cinema Arts and Techniques, which runs the Cesars, praised the director.
"Artist, filmmaker, producer, writer, actor, director, there are many words to define Roman Polanski but only one to express our admiration and enchantment: thank you, Mr President," said the organisation`s head, Alain Terzian, according to French newspaper Le Monde.
Mr Polanski, best known for the films Chinatown, Rosemary`s Baby and The Pianist, has French and Polish citizenship.
In December, Poland`s Supreme Court rejected a request by the nation`s justice minister to have Mr Polanski extradited to the US to face the charges.
His victim, Samantha Geimer, described the ordeal of giving testimony against Polanski, in an interview for the BBC`s Hardtalk programme in 2013.
The 42nd Cesars ceremony will take place in Paris on 24 February.
An online petition calling for him to be removed from the jury role had gathered just under 50,000 signatures on Friday.
"It is an insult to women and the suffering they can endure, an insult to victims of rape," it read.
Roman Polanski picked for French film panel, sparking outrage
21 January 2017
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France`s minister for women`s rights said it was a "shocking" decision to appoint filmmaker Roman Polanski as head of the jury for the country`s equivalent of the Oscars.
