The decision by Israel’s attorney general to formally charge Mr Netanyahu throws the country’s paralysed political system into further disarray and threatens his 10-year grip on power.
Attorney general Avichai Mandelblit charged Mr Netanyahu with fraud, breach of trust and accepting bribes in three different scandals, following a three-year investigation. It is the first time a sitting Israeli prime minister has been charged with a crime.
Mr Netanyahu appeared on national television, claiming he was the victim of a grand conspiracy by police and prosecutors.
He claimed the indictment stemmed from “false accusations” and a systematically “tainted investigation”, saying the country was witnessing an “attempted coup” against him.
He said: “Police and investigators are not above the law. The time has come to investigate the investigators.”
As the investigation gained steam in recent months, Mr Netanyahu has repeatedly lashed out at the media, police and justice system, drawing accusations that he was undermining the country’s democratic institutions.
Mr Mandelblit earlier rejected accusations that his decision was politically motivated and said he had acted solely out of professional considerations.
He told reporters: “A day in which the attorney general decides to serve an indictment against a seated prime minister for serious crimes of corrupt governance is a heavy and sad day, for the Israeli public and for me personally.”
According to the indictment, Mr Netanyahu accepted hundreds of thousands of dollars of champagne and cigars from billionaire friends, offered to trade favours with a newspaper publisher and used his influence to help a wealthy telecom magnate in exchange for favourable coverage on a popular news site.
The indictment does not require the 70-year-old Mr Netanyahu to resign, but it significantly weakens him at a time when Israel’s political system appears to be heading towards a third election in under a year.
Mr Netanyahu’s defiant response, along with calls from his rivals to resign, indicates a lengthy period of turmoil ahead.
The political party of Mr Netanyahu’s chief rival, former military commander Benny Gantz, said the prime minister has “no public or moral mandate to make fateful decisions for the state of Israel”.
Mr Mandelblit criticised the often-heated pressure campaigns by Mr Netanyahu’s supporters and foes to sway his decision, which came after months of deliberations. Both sides had staged demonstrations outside or near his home.
He said: “This is not a matter of right or left. This is not a matter of politics. This is an obligation placed on us, the people of law enforcement and upon me personally as the one at its head.”