Netanyahu's record 12-year hold on power was set to end when parliament votes on the new government, ushering in an administration that has pledged to heal a nation bitterly divided over his departure.
Netanyahu, the most dominant Israeli politician of his generation, had failed to form a government after a March 23 election, the fourth in two years.
The new cabinet, which will be sworn in after a Knesset confidence vote it is expected to win, was cobbled together by the centrist opposition leader Yair Lapid and ultra-nationalist Naftali Bennett.
Bennett, a hawkish hi-tech millionaire and an Orthodox Jew, tweeted a photograph of himself at prayer, captioned with a Biblical blessing. He will serve as premier for two years before Lapid, a former TV host, takes over.
They will head a government comprising of parties from across the political spectrum, including for the first time one that represents Israel's 21% Arab minority. They plan largely to avoid sweeping moves on hot-button international issues such as policy toward the Palestinians, and to focus on domestic reforms.