Netanyahu had sought the extension from President Reuven Rivlin saying although significant progress had been made in coalition talks, there were still agreements that needed to be finalised.
Rivlin granted the extension, noting that the maximum total time period that can be allowed by law is 42 days.
After the March 17 general elections in which Netanyahu's right-wing Likud party won the largest number of seats, the Israeli premier was on March 25 tasked by Rivlin with forming a new government.
Netanyahu was given 28 days to complete the task, but with the Wednesday deadline approaching, and no agreement in sight, he requested Rivlin for the extension early today.
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Rivlin wished Netanyahu luck and said that he knew that the whole country was waiting for the government to be declared so that important issue that cannot be decided by an interim government could be addressed.
Netanyahu will have until May 6 to form a coalition after not succeeding at finalising a deal with any party through the first four weeks of negotiations.
Even though all the parties that have extended Netanyahu support belong to the right-wing camp, ther are wide differences in their politcal agenda.
Jewish settlers in the West Bank backed Bayit Yehudi leader Naftali Bennett suggested in a tweet early today morning that negotiations to form a coalition with Likud had come to an impasse.
"Unilaterally taking the religious portfolio from religious Zionist and delivering it to Shas (Sephardic Jews backed orthodox religious party) ends negotiations with Bayit Yehudi," Bennet wrote in an indication of existing sharp differences within the camp.
If that does not work out, he will have to select a third person who has just 14 days to complete the task. In case that also fails, Rivlin would call a new election.