Prior to the deadline, some of the heaviest fighting of the conflict so far came after the Israeli cabinet approved a UN resolution calling for a halt to the month-old war.
Early on Monday morning Israeli planes flew over Beirut just two hours before the fighting was due to end, dropping leaflets that said: "To the Lebanese citizens: Hezbollah which is serving its Iranian and Syrian maters has led you to the edge of the abyss."
"Know that Israel defense forces will return and work with the required force against any terrorist act that will be launched from Lebanon to harm the state of Israel."
Residents were seen tearing up the leaflets according to an AFP correspondent in Beirut.
The prime ministers of both Israel and Lebanon have agreed to a cessation of hostilities beginning at 0500 GMT (0800 local time) on Monday.
Israeli media reports said the prime minister had ordered an early halt to the offensive from 2300 GMT on Sunday.
However, that has not been confirmed by military officials and agency reports said heavy gunfire could be heard in the region several hours after that time.
Following Sunday's cabinet meeting, Tzipi Livni, the Israeli foreign minister, said the Israeli army "will withdraw as the Lebanon army and the international force deploys".
The UN security council resolution envisages a phased withdrawal of Israeli troops from south Lebanon and the deployment of 15,000 Lebanese troops to the region alongside a further 15,000 UN peacekeeping troops.
Israel officials say they will still be entitled to use force to prevent Hezbollah from rearming even after the UN truce takes effect.
Livni said the ceasefire should also lead to the dismantling of Hezbollah.
The Lebanese government, however, which contains two Hezbollah cabinet members, has postponed a meeting to discuss the disarmament of the group's fighters.
Syria, which is widely seen as being supportive of Hezbollah, also said it supported the Lebanese government's endorsement of the UN resolution, the Syrian Sana news agency reported.
Israeli warplanes launched a series of strikes on Beirut's southern suburbs on Sunday, destroying 11 residential buildings and killing at least two people, witnesses and security sources said.
Southern Beirut was hit by a
series of Israeli raids
In total, 17 civilians and four soldiers were killed in Lebanon on Sunday, police said, as Israel continued its bombardment of the country.
Hezbollah launched more than 250 rockets at Israeli towns in the north - the largest total number in a single day.
Less than 24 hours before the ceasefire was to due to take effect, Israeli troops fought ferocious battles with Hezbollah fighters across several areas of southern Lebanon.
In Tyre, Israeli warplanes bombed five petrol stations, sparking a huge fire that threatened to engulf a nearby hospital.
Israeli's ground assault involves as many as 30,000 troops dropped into southern Lebanon in what military officials say is Israel's largest-ever air operation.
The Israeli army said that five of its soldiers had been killed in fighting in southern Lebanon on Sunday.
At least 24 Israeli soldiers were killed in combat Saturday, the highest single-day toll since the conflict began on July 12.
"If a single stone is thrown at Israel from whatever village that happens, it should be turned into a pile of stones"
Eli Yishai, Israeli trade minister
Mounting Israeli casualties have led some Israeli's to become critical of their government's handling of the war.
Shimon Peres, the Israeli deputy prime minister, said, "I think that we have finished more or less the victors both militarily and politically".
He told told Israeli army radio that Hezbollah would end with "its tail between its legs".
Eli Yishai, the Israeli trade minister, also issued a stark warning to Lebanon even if the ceasefire comes into force, saying, "If a single stone is thrown at Israel from whatever village that happens, it should be turned into a pile of stones."
Hezbollah leader Hassan Nasrallah said on Saturday, "As long as there is Israeli military movement, Israeli field aggression and Israeli soldiers occupying our land ... it is our natural right to confront them, fight them and defend our land, our homes, and ourselves."