The move, which came into force on Friday, is part of a crackdown on what Mayor Dario Nardella described as "a vast phenomenon that destroys the dignity of thousands of women".
Men who ask for sexual acts in return for money will be targeted, so the act doesn't necessarily have to take place for them to risk penalties.
Although organized prostitution and brothels are illegal in Italy, street prostitution is allowed and estimates suggest there are around 120,000 sex workers currently working in the country.
The order will be enforced across the city and not just in areas where prostitution is prevalent. Sex workers will not face penalties unless other crimes are committed.
Nardella said in a statement that “thousands of women are often reduced to a state of slavery, enabling organized crime to get rich in a shameful way. I hope Florence can be a good example for the whole country.”