The law is based on the European Packaging and Packaging Waste Directive and applies to a wide range of materials and products.
Manufacturers and importers will be required to recycle 60% of the total weight of the packaging they supply each year.
Local authorities are required to arrange for the separation of waste into two streams – wet and dry – as part of plans to ban waste being sent to landfill by January 2020.
The fine for non compliance with targets is 2,500 shekels (£432) per tonne.
Environment protection minister Gilad Erdan said: “Instead of burying raw materials, the packaging will be collected from homes and recycled.
“Implementation will add thousands of workplaces to the economy and prevent damage to the environment.”