Netanyahu announced the new appointment on Friday.
Bennett is expected to hold the office for a short period until a new coalition government will be formed.
Since the closely-fought election on September 17, Israel's political system has been paralysed in which no party won enough votes to form a majority coalition in the 120-seat parliament.
The election was the second one in five months. Netanyahu failed to form a coalition government following the April election, which led to this second election in September.