The veteran politician, 57, is expected to be formally named by NATO's 32 nations in coming days and should take over when current chief Jens Stoltenberg's term ends on October 1.
Rutte will come in at a perilous moment for the Western alliance as Russia's war in Ukraine drags on and Donald Trump battles to reclaim the US presidency in November.
After staking a claim for the NATO post following the collapse of his coalition, staunch Ukraine backer Rutte quickly won the support of the United States, Britain, France and Germany.
But he had to use all the diplomatic skills gleaned during almost 14 years in charge of the Netherlands to win over hold-outs led by Turkey and Hungary.
Rutte overcame Turkish reticence with an April visit to Istanbul, before finally sealing a deal with Hungary's Prime Minister Viktor Orban at a European Union summit this week.
That left the last sticking point as Iohannis, whose surprise bid had ruffled feathers among allies banking on a smooth appointment for Rutte ahead of a NATO summit in Washington next month.
Romania's security council on Thursday announced Iohannis had formally withdrawn and that the country backed Rutte.
NATO diplomats and officials said a meeting of alliance ambassadors would likely be convened next week to approve Rutte's appointment.
"It's taken a really long time," quipped Rutte to public broadcaster NOS. "It's a complicated process, but it seems to be going well."
- Trump looming? -
Rutte will have a lot on his plate when he takes the reins from Norway's former premier Stoltenberg, who has led the alliance since 2014.
Just weeks after his four-year term starts, the United States will have to choose between incumbent Joe Biden and Trump as president.
The prospect of the volatile Trump returning to the Oval office has rattled allies fearful he could weaken Washington's role as Europe's ultimate security guarantor.
Trump fuelled those fears on the campaign trail by saying he would encourage Russia to attack NATO countries not spending enough on their own defence.
Like Stoltenberg, Rutte won plaudits for his careful handling of Trump during his first term in power -- when the ex-reality TV star reportedly even mulled pulling the United States out of NATO.
"I think Mark Rutte is a very strong candidate," Stoltenberg said in Washington on Tuesday. "He has a lot of experience as prime minister. He's a close friend and colleague."
To NATO's east Rutte will face the far more pressing menace from Russia's President Vladimir Putin.
The Kremlin's forces are currently on the front foot in Ukraine after more than two years of conflict, and the NATO chief will have a key role marshalling aid from Ukraine's weary backers.
At the same time he will have to ensure the alliance is ready to defend against any potential future attack from Russia.
Part of that will involve corralling European allies to spend more on defence -- a key demand from Trump, and other US leaders.
Alongside Ukraine, the biggest challenge will be "to ensure that defence spending remains high in Europe... given the world we're living in," Rutte said.
This week NATO announced that 23 out of its 32 member countries had hit the alliance's target of spending two percent of gross domestic product on defence.
- 'Teflon Mark' -
Dubbed "Teflon Mark" for his ability to remain in power for so long in the Netherlands, Rutte will become the fourth Dutchman to lead NATO since it emerged from the ashes of World War II to confront the Soviet Union.
The bicycling conservative threw his country's economic weight behind Ukraine after Russia's 2022 invasion -- leading efforts to deliver F-16 fighter jets to Kyiv.
While NATO countries along the alliance's eastern flank had pushed for one of their own to get the NATO job, Rutte's backers insist he is fully aware of the threat posed by Russia.
Among the most formative events during his time in charge of the Netherlands was the 2014 shooting down of Malaysia Airlines flight MH17 over Ukraine, with 196 Dutch among the 298 killed, which a tribunal found was carried out by Russia-backed fighters.
bur-del-ric/tw
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