The jets will instead be used to fight fires.
The cost-cutting measure was agreed with the head of the Italian Air Force and announced by Letta on Monday.
The three planes – an Airbus 319 and two Falcon 900s – have a market value of around €50 million, according to a statement from the prime minister's office.
By redirecting the planes from transporting politicians to directly helping Italian citizens, the move will boost cash-strapped front-line services.
The decision to move part of the fleet to firefighting duties will be especially welcome in Sardinia, which has suffered extensive damage from wildfires in recent days.
Letta's decision follows on from legislation approved by his predecessor Mario Monti.
The planes were used for 5,952 hours in 2012, compared to 10,050 hours in 2010, when billionaire Silvio Berlusconi was premier.
Letta has also decided to reduce the government’s car service by 25 percent.