Raed Fatuh, a Palestinian Authority official in charge of the transfer of goods between Gaza and Israel, said Israel would be transferring 450,000 liters of fuel to the plant, which has been shut down for some 50 days.
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The PA does not hold sway over the Gaza Strip but does coordinate the transfer of goods from the territory with Israel, which Hamas does not recognize.
Israel sold the fuel to the PA, which paid with funds supplied by gas-rich Gulf state Qatar.
The Palestinian Energy authority said it hoped the power plant would be operational again later Sunday.
Torrential rains that began on Thursday caused heavy flooding in the enclave, with thousands of residents evacuated from their homes to schools.
An AFP correspondent said on Sunday the water level was dropping, but that many residents were still stranded.
Following a request from the United States, Israel on Friday allowed the transfer of gas for domestic heating and provided four water pumps.
In addition to the fuel for the power plant, Israel was also allowing in "800,000 liters of diesel fuel for transportation... and another 200 tons of household gas," the army said in a statement.
Fatuh said the transfer of the fuel and gas would continue on Monday and Tuesday.
Israel and the Palestinian territories were hard hit by the Middle East's heaviest storm in decades.
Snowfall severed access to hilltop towns and villages in the Jewish state and hundreds of thousands of people spent days without electricity.
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