"In Italy, I have been relegated to the sidelines, but Putin has told me he is willing to give me citizenship, and entrust me with running the economy ministry," La Stampa newspaper quoted him as saying at a dinner party.
"My future? Becoming minister for my friend Putin," the 78-year-old former Italian premier reportedly said.
Kremlin spokesman Dmitry Peskov, however, said that Putin's offer was more "figurative" than real and was merely a show of support for an old friend.
"Putin and Berlusconi share an old friendship. They keep in touch, and this is a true camaraderie," Peskov said.
"In this case... it should be seen as figurative support rather than a formal offer to take some official post, which, of course, is impossible," he was quoted by Interfax news agency as saying.
The controversial Berlusconi has been hit by a string of legal woes, most recently being sentenced to three years this month for bribing a senator.
Earlier this year, he completed a community service order for corporate tax fraud but was cleared of having sex with an under-age dancer known as Ruby the Heart-stealer after judges ruled he could not have known she was a minor.
Putin and Berlusconi are longstanding friends and during a visit to Rome by the Russian leader in June last month, the media tycoon pledged his Forza Italia party would work to lift sanctions on Russia.
Two years ago, France's larger-than-life actor Gerard Depardieu befriended Putin and was given a Russian passport after criticising taxes on top earners in France.
SEE MORE: Berlusconi and Putin: an enduring love