The bank, which plans to cut 14,000 jobs by the end of 2019, is offering a steep discount of about 38 percent for the new shares, based on their theoretical value after the rights issue.
UniCredit's shares closed at 26.6 euros in Milan on Wednesday, a gain of 5.7 percent.
On Monday, the bank warned that it expected a loss of 11.8 billion euros for 2016, after a nightmare year for Italy's banking sector, which is buckling under bad debts and weak economic growth.
UniCredit's chief executive, Frenchman Jean-Pierre Mustier, has been selling assets and cutting costs as part of a strategic restructuring called "Transform 2019".
"The successful completion of the rights issue will enable the group's capital requirements to be maintained" following the measures implemented as part of Transform 2019, the bank said.
The sale is being led by a consortium of banks - including Morgan Stanley, UBS, and Bank of America Merrill Lynch - which has agreed to purchase "any newly issued shares that remain unsubscribed at the end of the auction period", UniCredit said.
It hopes to complete the new share sale before March 10th.