The 73-year old firebrand leader is expected to clinch the country's top post after sitting in the Opposition for 14 months. However, multiple allegations of corruption and fraud are not expected to leave him in peace anytime soon.
Lapid concedes: Netanyahu's rival and the current caretaker PM Yair Lapid conceded defeat late on Thursday.
"I spoke tonight with the chairman of the opposition, Benjamin Netanyahu, and congratulated him on his victory in the elections," Lapid said on Twitter.
"The state of Israel is above all political consideration and I wish Netanyahu success for the sake of the people of Israel," he added.
What Are the Final Election Results?
With 100 percent of the votes having been counted, here is where different parties stand in Israel's Parliament – the Knesset.
Likud (Netanyahu's party): 32
Yesh Atid (Lapid's party): 24
Religious Zionism: 14
National Unity: 12
United Torah Judaism: 7
Yisrael Beytenu: 6
Voter turnout in the election was 78.6 percent – the highest since 2015, according to Israel's central election committee.
Coalition talks are currently in full-swing, and if they succeed - which they likely will – Israel could see the formation of the most far-right government in history.
Next week, Netanyahu will be invited by President Issac Hezrog to form the government. He will have 42 days to do so.
The right-wing bloc (comprising Likud, Religious Zionism, Shas, and United Torah Judaism) has won a total of 64 seats, three more than the majority in the 120-member Knesset. On the other hand, Lapid's alliance has won a total of 51 seats.
Likud's most powerful coalition partner is the far-right Religious Zionism Party. The ultra-orthodox alliance, led by Itamar Ben-Gvir, scripted history by doubling its tally in Parliament since the last election.
To keep his coalition afloat, Netanyahu will most probably grant a great deal of key posts to his far-right partners.
Crackdown On Palestinians Imminent?
Ben-Gvir is expected to become the public security minister in the new government, giving him complete control over the country's police agency.
This could spell greater woes for Palestine and the occupied West Bank as the far-right leader is well-known for his anti-Arab stance. On his orders, Israel's security agencies may crack down on Palestinians like never before.
In the past, Ben-Gvir has also publicly called for the formal annexation of the entire West Bank, and has demanded the post of public security minister to initiate the process.
"It's time we go back to being masters of our country," Gvir had said on the night of the election, according to AFP.
In fact, a majority of members in Netanyahu's coalition are opposed to a two-state solution, support the formal annexation of the West Bank, and want a fiercer response to attacks by Palestinians.
The Religious Zionism Party's Bezalel Smotrich has also said that he wants to become the country's defence minister – leading to justifiable fear among Palestinians, since Israel's internal and external security will be overseen by anti-Arab extremists.
How Is Palestine Reacting to Netanyahu's Win?
This comes in the backdrop of almost daily clashes between Israelis and Palestinians.
Over 100 Palestinians in the West Bank have already been killed this year by Israeli forces, while the total Israelis killed in street attacks number 20.
"No doubt the result of such a coalition will increase the hostile attitude towards the Palestinian people and make occupation measures more extreme," a senior member of the Palestine Liberation Organization was quoted as saying by Reuters.
Fundamentalist Palestinian group Hamas, which has fought several wars with Israel, also said that the election result would lead to a rise in violence.
"It is clear that the Israelis are leaning towards more extremism, which also means aggression against our people would increase," Hamas leader Hazem Qassem said.
"Netanyahu-led governments that launched several wars against our Palestinian people, and the presence of the most extreme figures in a coalition means that we are going to face more of the Zionist terrorism," he added.
(With inputs from Reuters, AFP and The Jerusalem Post.)