The money will be used to provide incentives for businesses to hire young people. As part of the proposal, the government would pay a year’s worth of social security costs on behalf of a company which takes on a young person on a fixed-term contract, the report said.
The details emerged from a meeting between labour and economic ministers and could form part of a package of measures to stimulate employment set to be approved by the government later this month.
The money would likely come from state funds and would be spread over a three-years, with the first tranche of €300 million provided in 2013, €400 million in 2014 and €400 million in 2015.
Forty percent of young Italians are out of work, according to the most recent figures.
Labour and economy ministers from Italy, France, Spain and Germany will tackle youth unemployment at a meeting in Rome on Friday.