The jobless rate fell to 12.6 percent from 12.7 percent in December, the national statistics agency Istat said on Monday, after a year which saw the jobless level reach its highest since 1977.
Istat said 11,000 new jobs were created in Italy in January over December.
Youth unemployment also fell to 41.2 percent in January from 41.4 percent in the previous month.
The new data will be a boost for Prime Minister Matteo Renzi, who overcame staunch opposition to the controversial Jobs Act, part of a labour market revamp which aims to make it easier for companies to hire and fire staff.
Meanwhile, the unemployment rate across the eurozone fell to 11.2 percent in January from 11.3 percent in December and from 11.8 percent in January 2014 – the lowest rate recorded since April 2012 – according to figures on Monday from Eurostat.