Investigators said Netanyahu should stand trial on charges of accepting bribes, fraud and breach of trust and fraudulently accepting benefits.
In a joint statement from Israel's police and the Israel securities authority, police said they also found sufficient evidence to charge Mr Netanyahu's family friend, Shaul Elovitch, with bribery.
Despite his dominance of Israeli politics, the newest police recommendation comes just after his right-wing coalition's majority was reduced to a precarious one seat in parliament.
The decision on whether to charge Mr Netanyahu rests with Israel's attorney-general, who is still weighing whether to indict Mr Netanyahu in the other two cases.
While Netanyahu was questioned as a witness and not a suspect in the submarine case, the accusations against his lawyer and others in the investigation have only added to the pressure the prime minister is facing.
Police say there is enough evidence to charge Elovitch with bribery, interfering with an investigation, and financial crimes.
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Sunday's recommendations involved Mr Netanyahu, Bezeq and the firm's largest shareholder, Mr Shaul Elovitch.
Netanyahu has been prime minister for a total of more than 12 years, from 1996 to 1999 and again since 2009. Mr Netanyahu is in his second stint as prime minister. "The police recommendations have no legal standing".
The attorney general will now decide whether to bring indictments in the case.
Those relate to allegations that Netanyahu accepted gifts from businessmen and that he tried to strike a deal with a different media mogul for better coverage in return for curbs on a competing newspaper.
She has already been charged with fraud and breach of trust for allegedly overspending roughly $100,000 on private meals at the prime minister's official residence, even as there was a full-time chef on staff. Hefetz was, police say, desperate to do something about the Elovitch investigation he believed was underway.
Following the latest statement from police on Sunday, opposition politicians once again called on Netanyahu to resign.
Meanwhile, head of the Labor Party Avi Gabbay, who also leads the center-left political alliance of Zionist Union, echoed Livni's call. Those benefits included restricting competition in the Israeli ground-line phone market, among other decisions taken by Netanyahu in the years he served as communications minister.