Israel's hardline premier has also instructed the foreign ministry to lobby other countries to act to stop Iran's nuclear activities, the radio said.
Mossad, Israels's overseas intelligence service, which is directly answerably to Sharon, has been put in charge of "all other aspects" of efforts to foil the Islamic republic's alleged covert nuclear programme, it added.
Israel and the United States accuse Tehran of trying to develop nuclear weapons, a charge Iran fiercely denies.
The plan of action was drawn up during a special meeting Sharon convened with Foreign Minister Sylvan Shalom, Defence Minister Shaoul Mofaz and Mossad agents, the radio said.
On November 17 Mossad chief Meir Dagan told MPs that Iran's nuclear programme posed the biggest threat to Israel's existence since the country was created creation in 1948.
Dagan said Israel had discovered Tehran was close to completing a uranium enrichment plant in Kachan, central Iran, which could eventually give it the capacity to build around a dozen nuclear bombs.
Iranian President Mohammed Khatami announced in February that a nuclear power plant would be built in Kachan after the discovery of a uranium mine in the region.
Defence Minister Mofaz later said concentrated efforts were needed "to delay, stop or prevent" Iran's alleged nuclear weapons programme.
During a visit to Washington earlier this month, Mofaz also warned that Iran would reach a "point of no return" in its suspected nuclear programme within a year unless there were concerted efforts to stop it.
The International Atomic Energy Agency (IAEA) recently released a report accusing Iran of conducting covert nuclear activities over two decades, including manufacturing plutonium, although it said there was no evidence as yet that it was trying to build a nuclear bomb.
There is no love lost between Israel and Iran. Iran does not officially recognise Israel's existence and top officials have advocated the destruction of the Jewish state.
Iran's former foreign minister, Ali Akbar Velayati, now a senior advisor to supreme leader Ayatollah Ali Khamenei, was quoted as saying earlier this month that the mere existence of Israel was contrary to Tehran's national interests.