"I congratulate President Trump and the US government on the important decision to re-impose sanctions on Iran," Netanyahu said in a statement on Monday, Xinhua news agency reported.
Netanyahu, a vocal opponent of the 2015 Iranian nuclear deal, called the renewed sanctions "an important moment for Israel, the US, the region, and the entire world."
The move "symbolizes the determination to curb Iran's regional aggression and its ongoing plans to arm itself with nuclear weapons," he said.
Netanyahu, who has accused Iran of secretly attempting to develop nuclear weapons, also urged European countries to follow Trump's move.
"It's time to stop talking. It's time to do. That's exactly what the United States did and that's what Europe needs to do," Netanyahu said.
Trump signed on Monday an executive order to re-impose a number of sanctions on Iran, saying the US policy is to impose "maximum economic pressure" on the Islamic republic.
The move came three months after Trump withdrew from the Iranian nuclear deal.
In 2015, Iran signed a landmark pact with six world powers, in which the West promises to relieve sanctions on Tehran in exchange for a halt in Iran's controversial nuclear programme.
Iran has repeatedly denied any attempts to develop nuclear arms after the nuke accord.