In a statement issued overnight after a cabinet meeting, it said it would seek to borrow an extra 32 billion euros (39 billion dollars).
The money will be used to offer “further help” to businesses and citizens “worst hit by the effects of the Covid-19 pandemic,” the government said.
Last year, Italy increased its public debt by more than 100 billion euros to fund furlough schemes and other economic relief measures.
Parliament would have to approve the new debt request but this is seen as a formality despite the political crisis threatening the government's survival.
Former premier Matteo Renzi, who this week triggered a government crisis mid-pandemic by pulling out of the ruling coalition, said his Italia Viva party would back any proposal to help virus-hit businesses.
Italy was the first country in Europe to have been overwhelmed by the pandemic.
To date, it has suffered nearly 81,000 virus deaths and its economy has plunged into a deep recession.
Italy's prime minister on Friday announced a new set of coronavirus restrictions in place until March 5th.
Health Minister Roberto Speranza was meanwhile expected to announce tighter regional coronavirus rules due to a worsening situation, valid from Saturday.
“The situation cannot be underestimated. Let's work together in a timely manner to anticipate the restrictions to avoid a new strong wave,” the minister told regional leaders on Thursday.
Much of the country is expected to be declared an orange zone later on Friday, depending on regional health data.
According to the Corriere della Sera newspaper, Lombardy, Emilia-Romagna and Calabria risk being reclassified as “red zone” regions, subject to a partial lockdown.