Gantz, a centrist former military chief, and the right-wing Netanyahu had fought three bitter, inconclusive elections over the past year, with neither man securing enough support to form a viable coalition.
Gantz was tasked with forming a government following the March 2 vote, but there was no guarantee he would succeed, given the deep divisions within the anti-Netanyahu bloc.
Anti-Netanyahu forces, who held a narrow majority in the Knesset, Israel's parliament, forced the ouster this week of ex-speaker Yuli Edelstein, a Netanyahu ally.
Gantz then put himself forward as Edelstein's replacement, a surprise move widely seen as an acceptance that he would not be prime minister -- at least not yet.
"These are unusual times and they call for unusual decisions," Gantz told the Knesset after his election to the speaker's post.
"That is why I intend to explore the formation of an emergency unity government," he added.
Details on an emergency government were not immediately clear, and any arrangement would likely be temporary, perhaps lasting long enough for Israel to pass through the worst of the pandemic.
Israel has more than 2,600 confirmed coronavirus cases and has imposed a total, nationwide ban on non-essential movement in the hope of containing contagion.
"The people of Israel are justifiably looking to us and expecting us to keep supporting the sacred battle against coronavirus and its effects," Gantz said.
Likud in a statement said details emerging in the media about the composition of a unity government were just "rumours."
Blue and White break-up
While attention has immediately turned to the expected unity deal, Gantz's move has also triggered an apparent break-up of his centrist bloc.
Top allies of Blue and White, the centrist party he led, on Thursday announced a break with Gantz, likely over his willingness to strike a deal with Netanyahu.
Two key partners in the Blue and White alliance -- the Telem and Yesh Atid parties -- immediately filed paperwork to split from Blue and White, spokesmen for both factions said.
Telem's Moshe Yaalon and Yesh Atid head Yair Lapid were widely thought to have opposed a unity deal with Netanyahu.
Blue and White sources indicated to AFP that the bloc would retain its name, but no longer considered Gantz its leader.
"I founded Blue and White, and I am proud of it," Gantz told parliament.
"It has been my intention, and it is still my intention, to do everything possible to keep us together. I urge all of my potential political partners to act in the same spirit," he said.
Netanyahu is the first Israeli premier to be indicted while in office, after being formally charged with bribery, fraud and breach of trust in January.
The veteran premier, in office since 2009, denies the charges.
Gantz had previously ruled out serving alongside a prime minister under criminal indictment, but that was before the coronavirus pandemic unfolded.
Netanyahu offered Gantz a series of deals since the March 2 vote, including scenarios where the job of premier would rotate between the two.