Children born to immigrant parents in Italy have to wait until they turn 18 before being eligible for citizenship.
But the new bill, which has now been passed to the Senate, would grant citizenship to babies born to foreign parents in the country if at least one of the parents has a long-term permit to stay.
The move, which was passed by the house on Tuesday with 310 voting in favour, 66 against and 83 abstaining, was hailed by Lower House speaker Laura Boldrini.
"The House today helped bring down a wall, at a time in which walls are sadly becoming popular again,” she was quoted by Ansa as saying.
“It brought down a barrier that has kept so many young and very young new Italians separate from their play and schoolmates.”
The parent would need to file a declaration of intent before the child turns 18. If they fail to do so, then the child can apply for citizenship themselves within two years of turning 18.
Meanwhile, the 127,000 people who were born to foreign parents in Italy, but who have passed the age of 18, would also be eligible to apply, providing they spent five years in the country's education system.
Needless to say, the bill didn't go down well with politicians from the anti-immigration Northern League, who shouted “shame” as it was passed.
Vincenzo Spadafora, the head of Italy's authority for children and adolescents, told Ansa that the move "certainly represents a substantial step forward in terms of civilization for a country such as ours, which can no longer overlook the fact that these girls and boys are already de facto Italians."
By Ellie Bennett