If an indictment does occur, there is no law requiring Netanyahu to quit.
The police recommendation will now go to Israel's Attorney General, Avichai Mendelblit, to decide on filing charges against the troubled prime minister.
But an indictment may still be far away.
Former Police Affairs Reporter at The Jerusalem Post Ben Hartman told Business Insider police accusations may not lead to a surefire outcome.
"A police recommendation can help convince the prosecutors, simply due to the fact that the recommendation is based on the evidence in the case, and that's what the prosecutors will look at," he said.
Still, the police's evidence may not be enough to sway legal authorities, according to Hartman, and many instances of police recommendations in Israel do not end in indictments.
"The prosecution can definitely disagree and they do at times," he said, adding that the severity of the allegations could affect the chances of indictment.
"If it's bribery ("shochad") that's more serious than breach of trust," Hartman said.
If Netanyahu were to be indicted it would send shockwaves through Israel's Parliament, and deal a huge blow to the Prime Minister who has maintained power in Israeli politics for over 20 years.
Even in the case of an indictment, Netanyahu may not step down from power.
In Tuesday's statement, Netanyahu said nothing would "sway" his decision to stay in his role.
"I will continue to lead the State of Israel with responsibility and loyalty, as long as you, the citizens of Israel, choose me to lead you," he said.
And there may not be a legal way to remove him from power if an indictment is given as Israel has no concrete law in place requiring the prime minister to quit under a criminal indictment.
Rather, as Hartman described it, it is "just the accepted norm."
"If he is indicted, the pressure will be on him to step down," Hartman said.
Israel's former Prime Minister Ehud Olmert faced corruption charges throughout his premiership in 2006-2009, but ultimately made the decision to resign before charges were handed down.
Meanwhile, Netanyahu's coalition partners have put little pressure on him to step down, although that could change as details of the allegations continue to emerge.
For now, the next steps lay with the Attorney General Mendelblit. However, he has close ties to the Prime Minister, having previously served as Netanyahu's Cabinet Secretary in 2013.
Demonstrators have been holding regular protests outside Mendelblit’s home in Israel, and have accused him of purposely dragging out the investigation on Netanyahu, which he denies.