Israel's far-right Jewish Power party has signed a coalition agreement with Benjamin Netanyahu's Likud party.
Its leader, Itamar Ben-Gvir, is set to become national security minister under the deal.
The ultra-nationalist politician is known for his anti-Arab comments and has a past conviction for racism.
It comes after Likud and its religious and far-right allies won a majority in an election earlier this month, marking a dramatic comeback for Mr Netanyahu.
"We took a big step tonight toward a full coalition agreement, toward forming a fully, fully right-wing government," Mr Ben-Gvir said in a statement after the deal was agreed.
Negotiations with other potential coalition partners are continuing.
Mr Ben-Gvir is a controversial figure in Israel. He was a follower of the late, explicitly racist, ultra-nationalist Meir Kahane, whose organisation was banned in Israel and designated as a terrorist group by the United States.
In the past, he has called for the deportation of citizens considered "disloyal".
While he has attempted rebrand himself as a more conventional politician, he still takes an extremely hard line on security issues.
This year has seen increased tension between Israelis and Palestinians, with gun and knife attacks targeting Israelis, and Israeli military raids killing Palestinian gunmen and civilians in the occupied West Bank.
On Wednesday, a teenager was killed and 14 people were injured in two suspected bomb attacks at Jerusalem bus stops. Mr Ben-Gvir visited the site of the first explosion.
"Even if it's in the West Bank, lay siege to them and go from house to house in search of guns and restore our deterrence power," he said during the visit.
The election ended an unprecedented period of political deadlock in Israel that began in 2019, when Mr Netanyahu - who was prime minister at the time - was charged with bribery, fraud and breach of trust, which he denies.
He was eventually ousted from power in 2021 after 12 straight years leading the government, promising at the time: "We'll be back!"
He appears to have made good on the promise, winning a clear majority with his political allies just over a year later.
However, with coalition talks still ongoing, the final make-up of his government is not yet clear.