The two rivals were deadlocked following last month's elections, with neither able to easily form a majority coalition, raising the possibility of an unprecedented third election in less than a year. President Reuven Rivlin formally granted the mandate to Gantz late Wednesday, giving him 28 days to form a government. If he fails, another member of parliament could potentially assemble a majority coalition, but that scenario has never happened.
Gantz and Netanyahu together have enough seats to easily form a national unity government, but they are divided over who should lead it.
Israel's former military chief Benny Gantz is set to receive an official mandate to form the country's next government but has few options after last month's elections left him in a near tie with Prime Minister Benjamin Netanyahu.
Netanyahu was given the first opportunity to form a government after assembling a large right-wing bloc but announced this week that he failed to build a 61-seat majority.
Gantz faces similarly steep odds, raising the possibility that Israel will hold a third election in less than a year.
President Reuven Rivlin will formally later on Wednesday grant the mandate to Gantz, who will have 28 days to form a coalition.
Both Gantz and Netanyahu say they favor a national unity government but are divided over who should lead it.