IDF Chief of Staff Gabi Ashkenazi on Monday appointed Gen. Giora Eiland, the former head of Israel's National Security Council, to lead the military investigation.
Israel over the weekend rejected a United Nations proposal to establish an international commission to probe the deaths.
The Israeli investigative team will use Navy testimonies gathered following the incident and ask its own questions, Haaretz reported.
Prime Minister Benjamin Netanyahu also decided to appoint a state panel of inquiry into the incident after deliberating with his forum of seven ministers, Haaretz reported Monday. The forum had deliberated over the panel for days.
Top justices experienced in matters of international and marine law -- including at least one American observer -- will make up the panel, Haaretz reported, citing an unnamed source.