Probabilistic Models are regularly applied in Genetic Regulatory Network modeling to capture the stochastic behavior observed in the generation of biological entities such as mRNA or proteins. Several approaches including Stochastic Master Equations and Probabilistic Boolean Networks have been proposed to model the stochastic behavior in genetic regulatory networks. It is generally accepted that Stochastic Master Equation is a fundamental model that can describe the system being investigated in fine detail, but the application of this model is computationally enormously expensive. On the other hand, Probabilistic Boolean Network captures only the coarse-scale stochastic properties of the system without modeling the detailed interactions. We propose a new approximation of the stochastic master equation model that is able to capture the finer details of the modeled system including bistabilities and oscillatory behavior, and yet has a significantly lower computational complexity. In this new method, we represent the system using tensors and derive an identity to exploit the sparse connectivity of regulatory targets for complexity reduction. The algorithm involves an approximation based on Zassenhaus formula to represent the exponential of a sum of matrices as product of matrices. We derive upper bounds on the expected error of the proposed model distribution as compared to the stochastic master equation model distribution. Simulation results of the application of the model to four different biological benchmark systems illustrate performance comparable to detailed stochastic master equation models but with considerably lower computational complexity. The results also demonstrate the reduced complexity of the new approach as compared to commonly used Stochastic Simulation Algorithm for equivalent accuracy.