The men are Italian citizens but have lived in the UK for several years, where they adopted their two sons.
The decision marks the first time that Italy has officially recognized an adoption in a different country by a gay couple.
Florence's Court for Minors issued the ruling on Wednesday, granting both children Italian citizenship.
The family was represented by lawyer Susanna Lollini of LGBT law firm Rete Lenford, who on Thursday said the decision was "undeniably a huge satisfaction from a personal and professional point of view, but even more so from a human point of view."
The decision differs from similar cases which have seen gay women allowed to adopt their partners' biological children. And in February this year, two gay men were recognized as the legal fathers of a child born to a surrogate mother in America, the first time an Italian court ruled that a child had two fathers.
Such cases are decided on an individual basis, after the so-called 'stepchild adoption clause' was scrapped from Italy's civil unions bill, passed in 2016.
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But Wednesday's decision, issued by the Florence Court for Minors, is the first to deal with children who are not biologically related to either parent.
Several factors were taken into account, including the fact that British authorities had carried out a "long and thorough" assessment of the couple's suitability as adoptive parents.
The court noted that if Italy did not recognize the parent-child relationship, "this would result in a legal uncertainty that would negatively affect the children's development of personal identity."
Judges concluded that the family in question was "a real and authentic family, and the parent-child relationship as such should be fully protected".