Prices slipped by 0.1 percent last year from 2015, according to provisional figures from the national statistics institute Istat.
Italian consumer prices already showed their weakest increase in decades in 2015, rising by just 0.1 percent.
Although inflation went negative in 2016, there was a pickup in prices towards the end of the year. In November they rose by 0.1 percent year-on-year and in December by 0.5 percent, surprising analysts who had been expecting 0.3 percent.
In November, Istat said it expected zero inflation in 2016 and 1.0 percent in 2017.
Analysts at Intesa Sanpaolo said, however, that they do not expect price rises to exceed 0.8 percent this year.