"Lebanon has agreed to an Italian request to extradite (former) senator Marcello Dell'Utri," who was arrested in Beirut in mid-April on an Interpol warrant, said lawyer Nasser al-Khalil.
Khalil said he will appeal the extradition order.
An official source confirmed the decision and said outgoing President Michel Sleiman signed the extradition agreement with Italy just hours before his mandate ends at midnight Saturday.
The source, who declined to be named, did not say when the suspect would be handed over.
A judicial source confirmed to AFP that Lebanon had agreed to extradite Dell'Utri.
Earlier this month, Italy's top court upheld a seven-year sentence against Dell'Utri, who is accused of serving as a mediator between Berlusconi and the Sicilian mafia.
The 72-year-old led the advertising arm of Berlusconi's media business empire, and helped his political debut with the foundation of the Forza Italia (Go Italy) party in the early 1990s.
Italian prosecutors allege Dell'Utri used his mafia contacts to buy protection for Berlusconi as the media magnate rose to political prominence.
He was arrested in Beirut on after Italy said he was considered a flight risk.
Berlusconi himself began community service in Italy on May 9th for tax fraud, marking a spectacular fall from grace.