In the early hours of Saturday after meeting for more than six hours, the government ratified the agreement, Netanyahu's office said in a statement.
Media reports said 24 ministers in Netanyahu's coalition government voted in favour of the deal while eight opposed it.
The war between Israeli forces and Hamas has razed much of heavily urbanised Gaza, killed more than 46,000 people and displaced most of the enclave's pre-war population of 2.3 million several times over, according to local authorities.
In Gaza on Friday, Israeli warplanes kept up heavy strikes, and the Palestinian civil emergency service said 116 Palestinians, almost 60 of them women and children, had been killed since the deal was announced on Wednesday.
Israel will release all Palestinian women and children under 19 detained in Israeli jails by the end of the first phase.
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