The historic square, one of the ancient gateways to the city, will host pre-qualifying matches before the tournament begins in May, said the head of the Italian Tennis Federation, Angelo Binaghi.
The rest of the competition, which takes place this year from May 7th-20th, will be played as usual on the clay courts of the Foro Italico, by the Olympic Stadium.
Speaking at a press conference alongside the Mayor of Rome Virginia Raggi, Binaghi said that organizers are counting on full days of play "right in the square that perhaps more than any other symbolizes the heart of our capital".
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The announcement did not go down well with Italian consumer rights watchdog Codacons, which expressed concern over potential damage to a Roman landmark and urged the tournament to choose a lesser-known venue outside the centre to encourage visitors to venture into the city's overlooked outskirts.
The group has threatened to fight the city council in court if it allows the plan to go ahead.
It's not clear whether the matches in the pedestrianized piazza, overlooked by hilltop gardens and surrounded by some of Rome's busiest shopping streets, would be ticketed or free to all.
In the past, the square has hosted free viewings of sports events broadcast on giant TV screens. It has also been the scene of sporting celebrations, most recently the impromptu party that broke out after AS Roma beat Barcelona to advance in the Champions League, which peaked with the football club's chairman doing a backward somersault into one of the square's fountains.
Before the Euro 2012 football semi-finals. Photo: Vincenzo Pinto/AFP
The pre-qualifying round is scheduled to begin on May 5th.
Several of tennis's biggest names are already confirmed to play in this year's tournament, including Serena Williams, Rafael Nadal and Novak Djokovic, as well as homegrown contenders Fabio Fognini, Andreas Seppi, Roberta Vinci and Sara Errani.
Founded in Milan in 1930, the Italian Open is Europe's second-biggest clay court championships after the French Open. In 1935 Benito Mussolini had it moved to Rome, where it is still played today in the sports complex where the dictator once dreamed of hosting the Olympics.