The prime minister's bureau indicated the appointment was a done deal. It said Sharon announced Dagan's "appointment" adding he will take over from Ephrayim Halevy "in a few days." However the Civil Service Commission's spokesman said a committee must check the nomination before it comes to the cabinet.
Observers suggested the appointment means Sharon wants a more aggressive intelligence organization.
Dovish politicians criticized the appointment because Dagan joined the Likud and helped Sharon's election campaign.
"Someone who identifies himself with a certain party and a candidate for prime minister should forgo his desire for a state position such as head of the Mossad," opposition leader Yossi Sarid said.
Dagan, 55, emigrated from Russia at the age of five, was wounded twice, and walks with a cane. He commanded a secret undercover unit that helped crush an uprising in the Gaza Strip in the 1970s. At one time, he reportedly landed there from the sea, pretended to be a Palestinian and joined local militants saying he wanted to help. Cloth stained with chicken's blood was wrapped around his neck to convince people he was wounded and could not talk. For a week, he gathered intelligence and then returned with his forces.
Journalist Ran Adelist wrote of Dagan in Yediot Aharonot's Web site: "Throughout his career the end justified the means. A moral or political consideration were never his strong side."
In the 1970s, Dagan operated under Sharon who was a major general responsible for southern Israel and that area. Sharon often prided himself for having crushed the Gazan militants but his methods came under so much criticism that GHQ relieved Sharon of responsibility for the strip.
In 1980, Dagan was appointed commander of southern Lebanon, a narrow strip in which Israel wielded considerable influence. Later, he headed a liaison unit in charge of relations with the Israel-backed South Lebanon Army.