The drones are operating out of the US Navy Air Station, Sigonella, near Mount Etna – which was used regularly by Nato forces during the Libyan civil war in 2011.
Italian Prime Minister Matteo Renzi told Italian radio station RTL102.5 that each authorization would be issued “on a case by case basis.”
Renzi said that only missions with a 'defensive' scope – those aimed at protecting US special forces on the ground, would be allowed.
"If there is evidence that terrorists are preparing for attack Italy will do its part like everybody else,” he added.
US military leaders are thought to be pushing for the Italian government to allow armed drones to run offensive operations too, but Italian officials are reluctant due to a lack of popular support for direct military intervention and concerns over frequent incidents involving friendly fire.
Last October, 19 people were killed in a drone attack on a Doctors Without Borders hospital in Afghanistan.
“It's not a prelude to military intervention,” Foreign Minister Paolo Gentiloni told La Repubblica.
In the past, Gentiloni has expressed concern that the estimated 6,000-strong Isis fighters in Libya could easily use the country as a springboard to launch an attack against Italy.