"Israeli opposition parties have reached an agreement to form a new government, ending Netanyahu's 12-year tenure as a PM"
Yair Lapid, the leader of the centrist Yesh Atid party, declared the formation of an eight-faction coalition.
Naftali Bennett, the leader of the right-wing Yamina faction, will serve as prime minister first, before handing over to Mr Lapid, according to a rotating arrangement.
Before the government is sworn in, it must pass a parliamentary vote.
Mr Lapid said he had told President Reuven Rivlin of the agreement in a statement, adding, "I pledge that this government will act in the service of all Israeli people, whether they voted for it or not."
If the coalition fails to gain a majority in the 120-seat Knesset, the country will be forced to hold elections for the fifth time in two years.
The coalition's representatives serve every political faction in Israel. Apart from their attempt to succeed Mr Netanyahu, the parties have nothing in common politically.