The government "unanimously approved" the 40 million shekel ($11 million) "plan for the demographic development of the Golan... in light of the war and the new front in Syria and the desire to double the population", Netanyahu's office said.
Israel has occupied most of the Golan Heights, a strategic plateau, since 1967 and annexed that area in 1981, a move recognised only by the United States.
Netanyahu said that "the strengthening of the Golan is that of the State of Israel, and it is particularly important at this time. We will continue to establish ourselves there, develop it and settle there".
The occupied Golan is home to around 30,000 Israelis and about 23,000 Druze Arabs, whose presence predates the occupation and most of whom retain Syrian citizenship.
Saudi Arabia and Qatar swiftly denounced the Israeli move. Riyadh's foreign ministry expressed "condemnation and denunciation" of the plan in a statement, calling it part of the "continued sabotage of opportunities to restore security and stability in Syria". Doha said the Israeli declaration was a "new episode in a series of Israeli aggressions on Syrian territories and a blatant violation of international law".
Last week, Netanyahu declared that the annexed Golan would be Israeli "for eternity".
Washington in 2019 became the first and only country to recognise Israeli sovereignty over the Golan, during Trump's first term. Israel has previously announced plans to increase the number of settlers in the Golan, with the government of then-premier Naftali Bennett approving a $317 million, five-year programme to double the settler population in December 2021..At the time, the Israeli population in the occupied Golan Heights was around 25,000.