A Maariv report of Dermer's likely departure came just days after another key Netanyahu confidant, cabinet secretary Zvi Hauser, announced he would be leaving office once a new government was sworn in.
Dermer enjoys a close relationship with Netanyahu, and has served as one of his central advisors since Netanyahu began his second term as prime minister in 2009.
The 42-year-old Dermer's interest in stepping down is believed to have to do with the non-stop rigor of the job and a desire to spend more time with his family – he has four small sons and a another child on the way -- and not to any policy disagreements with the prime minister.
Dermer's name was raised recently as a possible replacement for Michael Oren as Israel's next ambassador to Washington. Netanyahu, when asked last month by The Jerusalem Post whether Dermer would be named ambassador to the US, replied, "I have not yet made any decisions to that effect."