Israel's cabinet has approved the launch of a state investigation into an affair involving the purchase of submarines and other warships from Germany.

Prime Minister Naftali Bennett abstained in the vote setting up the inquiry, reportedly citing concerns it would interfere with the military procurement.
Prime Minister Naftali Bennett abstained in the vote setting up the inquiry, reportedly citing concerns it would interfere with the military procurement. (AP)

Israel has voted to establish a formal inquiry into a 2012 naval procurement that has been marred by corruption allegations implicating ex-military brass and close associates of former premier Benjamin Netanyahu.

Prime Minister Naftali Bennett, who ousted Netanyahu in June, abstained in Sunday's vote setting up the inquiry, reportedly citing concerns it would interfere with the military procurement.

In tweet before cabinet approved the probe, Foreign Minister Yair Lapid called the submarine affair "the most serious security corruption case in the history of Israel.

"It is necessary to turn over every stone to reach the truth."

The approval of a state investigation came more than a year after Defense Minister Benny Gantz authorised a probe into Netanyahu's role in the affair. 

Gantz said on Twitter after the vote that launching the investigation is of “the highest security need, and a clear message that you cannot play with Israel's defense.” 

Anti-Netanyahu protesters who demonstrated outside his Jerusalem residence until his ouster from office last year had called for an investigation into his role in the submarine scandal. 

Netanyahu is currently on trial in three other corruption cases and has denied any wrongdoing. 

READ MORE: Five things to know about Netanyahu administration's corruption cases

'Submarine affair'

Netanyahu has not personally been accused of wrongdoing in the so-called "submarine affair", which concerns a multi-billion shekel deal to acquire naval vessels from the German industrial giant Thyssenkrupp.

David Shimron, Netanyahu's personal lawyer and cousin, had been expected to face charges but prosecutors decided to drop the case against him last year, following a pre-indictment hearing.

Miki Ganor, Thyssenkrupp's representative in Israel, has been charged with bribery.

The newly established commission will look at the procurement process but will not investigate defendants currently on trial.

This month, Gantz announced a separate agreement to buy three further submarines from Thyssenkrupp in over $3 billion deal, to replace older ships retiring at the end of the decade.

The Defense Ministry said they were not part of the state investigation. 

READ MORE: Israel signs multi-billion dollar submarine deal with Germany

Source: AFP