First Israeli envoy to Turkey since 2010 starts work
Eitan Naeh was received by Erdogan at the presidential palace in Ankara, handing over his formal credentials and introducing his staff, a video shared on the Turkish president's website showed.
The video showed Erdogan, who has in the past been bitterly critical of Israel, greeting the new envoy warmly and sharing a few words.
Naeh is the country's first envoy since Israeli commandos raided a Gaza-bound ship of activists in 2010, sparking an unprecedented feud between the one-time key allies.
The career diplomat previously worked in Ankara between 1993 and 1997 and was serving as deputy head of mission at the Israeli embassy in London before being chosen for the new role.
In the aftermath of the raid which killed 10 Turkish activists, the two countries pulled their envoys out from the respective capitals as relations fell to an all-time low.
The rift came to an end in June after long-running secret talks in third countries.
Israel paid $20 million [18 million euros] in compensation in September and offered an apology over the raid as well as permission for Turkish aid to reach Gaza.
Last month, Turkish Prime Minister Binali Yildirim's foreign policy advisor Kemal Okem was chosen as Ankara's ambassador to Israel.
Okem will start work on December 12, state-run news agency Anadolu said last week, marking the very final step in the diplomatic reconciliation.
On Friday, a Turkish prosecutor called for charges related to the raid to be dropped because of the terms of the deal agreed between Israel and Turkey.
In the agreement ratified by both sides, individual Israeli citizens or those acting on behalf of the Israeli government would not be held liable - either criminally or financially - for the raid.
The next hearing in the case is due to be held on Friday, Anadolu said.