Israeli Prime Minister Benjamin Netanyahu formally notified President Reuven Rivlin that he was able to form a government, after 18-month-long political deadlock.
In a letter to President Rivlin on Wednesday, Netanyahu informed them that he has "succeeded in forming a government", which he will present to Parliament on Thursday, reports Xinhua news agnency.
Netanyahu was tasked by Rivlin to put together a new government after Benny Gantz, leader of the Blue and White party, failed to do so following the March 2 elections, the third in 12 months.
Netanyahu and Gantz, two former bitter rivals, signed a deal to form a power-sharing government in April.
Under the unprecedented agreement, Netanyahu will serve as Prime Minister for at least 18 months before being replaced by Gantz.
Gantz will serve as Defence Minister and "alternate Prime Minister", a title which did not exist before in Israeli politics.
He resigned as Parliament Speaker on Tuesday night, ahead of the swearing-in of the new government.
In place of Gantz, Yariv Levin, tourism minister and Netanyahu's close associate, will be appointed as the speaker.
Netanyahu's long-time pro-settler ally, the Yamina party, apparently will not join the unity government.
Both Yamina, headed by Education Minister Naftali Bennett, and Netanyahu's Likud party announced on Wednesday that they could not reach an agreement over which portfolios will be held by Yamina.
The new government will be inaugurated after three rounds of elections that produced inconclusive results and some 18 months during which Israel did not have a permanent government, paralyzing Israel's political arena.
It is slated to be the largest in Israel's history with between 34 to 36 ministerial portfolios.
The excess comes at a time when the projections for the Israeli economy were that it will shrink in 2020 and there are approximately one million unemployed people.
According to the deal reached between Gantz and Netanyahu, Israel could begin to move on annexation of parts of the West Bank as early as July as part of the implementation of the US peace plan for Israelis and Palestin.
( With inputs from IANS )