Ignazio Marino, the Italian capital's centre-left mayor, gave his blessing on Friday evening to the experiment in the EUR business district south of the city.
The local council there has proposed allowing prostitution in one non-residential area with the aim of reducing the impact of a trade currently conducted on more than 20 streets in the district.
Police will be ordered to impose fines of up to 500 euros on prostitutes caught working outside the permitted area, which will be supervised by health and social workers in a bid to counter exploitation by pimps and traffickers and promote safer sex.
If the experiment proves successful, the council wants to establish up to three separate red light zones within the district.
Local resident Cristina Lattanzi campaigned for the change, describing the current situation as an unsustainable "nightmare".
"EUR is already the city's red light district with more than 20 streets under siege day and night," she told La Repubblica.
"There are streets for transvestites, streets for very young girls, streets for male prostitution. Us residents need a bit of peace."
Church opposition, local backing
Objections to the initiative have been raised by the centre-right opposition on Rome's municipal council, Church figures and even by some within mayor Marino's Democratic Party (PD).
"I hope it is just a bizarre idea dreamed up to draw attention to the problem," said PD councillor Gianluca Santilli, who argued that the idea would lead to unacceptable prostitute "ghettoes."
Avvenire, the weekly magazine of the Conference of Italian Bishops, called the plan "shameful" for "a city that is the cradle and the heart of Christian humanism."
Giovanni Ramonda, of the Pope John XXIII Community, said Rome would be introducing "tolerance zones for the slavery of women."
The Catholic group is campaigning for Italy to enact similar legislation to Sweden, where efforts to eliminate prostitution have involved criminalizing clients rather than sex workers.
Ramonda added: "This shows the urgent need for Italy to address the phenomenon of prostitution as other European countries are doing by attacking the demand for it and introducing a system of progressive fines for clients."
But the scheme won backing from the council leader in a neighbouring district, who said many parts of the capital faced similar problems with the social side-effects of street prostitution, which is already tolerated in practice in some peripheral parts of the capital.
"It is a courageous move and one the whole city - institutions and associations - needs to get behind," said Andrea Catarci.
Nine million clients
Italy has 70,000-100,000 prostitutes and 2.5 million men who regularly use their services, government and other researchers estimate.
One survey concluded that nine million Italian men, more than one in three of the adult male population, had used a prostitute at least once.
Half the prostitutes in Italy are foreign nationals and two-thirds work on the streets.
The law does not ban the sale of sex but soliciting, pimping and operating a brothel are illegal.