The bill, according to a statement put out by the prime minister's office, "is designed to protect literature and authors in Israel."
"As the People of the Book, we are committed to maintaining the income of the authors who create our cultural treasures," Netanyahu said.
In a statement, Steimatzky's chief executive, Iris Barel, welcomed the new legislation and said her company would comply with whatever is decided.
"The Steimatzky chain has worked incessantly in the last two years to promote a law that promises proper compensation for Israeli authors and a variety of original Hebrew books to the Israeli public," she said. The company declined further comment.
David Gilo, director of the Israel Antitrust Authority, had opposed the bill, arguing that the government shouldn't intervene in a competitive market and warning that prices might go up to the point that customers won't buy.
But Culture Minister Limor Livnat predicted free market pressures would compel publishers to keep books at "reasonable" rates.
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