Justice officials say the testimony of the women involved is reliable.
Mr Katsav last year called off a plea bargain that would have seen him plead guilty to sexual misconduct but avoid more serious charges.
A spokesman for Mr Katsav, who quit his post in 2007, says he now welcomes the chance to prove his innocence in court.
The charges relate to accusations by a number of women staffers who worked under Mr Katsav while he was tourism minister and president.
The decision to indict him “was made after the attorney general and state prosecutor reached the conclusion that the complainants’ testimony was reliable and that there is sufficient evidence for an indictment”, the justice ministry said.
Justice officials have not said when the indictment will be formally filed.
The BBC’s Tim Franks in Jerusalem says this has been a tortuous legal tale, already lasting nearly three years.
Under the terms of the proposed plea bargain, prosecutors had agreed not to seek a jail term if Mr Katsav admitted to sexual harassment and indecent acts.
Part of the controversial plea bargain deal was for him to step down as president of Israel, a largely ceremonial role. He was also supposed to pay damages to his accusers.
The deal was widely criticised in Israel for its leniency, our correspondent says.
But in a surprise move, Mr Katsav withdrew from the deal at a hearing last April, telling the court he wanted to fight for his innocence.
The former president has accused the Israeli media of mounting a politically motivated witch-hunt against him.
Originally, the police charged Mr Katsav with rape, sexual harassment and abuse of power.
Rape convictions in Israel carry a maximum sentence of 16 years in prison.
Mr Katsav was replaced as president by Shimon Peres.