The cabinet will approve a new immigration bill within two weeks, relaxing restrictions adopted by the previous centre-right government, Interior Minister Giuliano Amato said on Wednesday.
Speaking during a committee hearing in parliament, he said the long-awaited bill was now in its final stages.
"I believe the cabinet will approve the measure within two weeks at most," said Amato.
The government has cited various reasons for changing the 2002 law, including the length of time it takes to issue residency permits.
The legislation has also been criticized for the fact that only foreigners with an Italian work contract are allowed a residency permit.
Residency permits last just two years and if immigrants lose their job before the expiry date they are required to leave the country.
Another key change in the bill relates to Italy's controversial immigrant holding centres, known as CPTs.
The existing system of housing migrant arrivals was greatly expanded by the last government, and since then the CPTs have been the target of mounting criticism, demonstrations and constant media attention.
Critics say the centres are basically prisons, where migrants are kept in overcrowded conditions and without fundamental rights.
Migrants can be held in the CPTs for up to 60 days while authorities try to identify them, process any asylum requests and decide whether to expel them from the country or release them.
Amato said the proposed bill would reduce the number of CPTs, following recommendations by a special ministry taskforce set up to inspect the centres.
"The new bill establishes that CPTs will be used exclusively to house those we have yet to identify," Amato promised on Wednesday. "There will therefore be far fewer people there and we won't need so many of the centres.
"They will also be totally separate from reception and identification centres for newly arrived migrants, with an entirely different atmosphere".
The centre left promised a broad overhaul of the country's immigration legislation as part of its electoral platform and has begun looking at a series of related issues since coming to power in April 2006.
Other legislative changes under discussion include the introduction of a single asylum law and a points-based entry system to encourage managed migration.
Proposals are also being drawn up to grant certain immigrants the vote and make it easier for them to gain Italian citizenship.
IMMIGRANTS DRAWN TO ITALY.
Italy is a popular destination for would-be immigrants seeking a gateway into Europe, and thousands leave from north African ports every year, heading for its southern shores.
The tiny Sicilian island of Lampedusa, which is closer to Tunisia than to mainland Italy, has traditionally borne the brunt of migrant landings from Africa.
However, following the arrival in Sardinia of six boats carrying Algerian immigrants over the last two days, police officials on Wednesday suggested traffickers may be expanding their network.
"These landings can no longer be viewed as isolated incidents," Daniel Melis, the commander of Cagliari's Carabinieri special ops, told reporters.
He pointed out that the northeast Algerian port of Annaba, where the latest group arrived from, was just 125 miles from southern Sardinia.
"With good weather and calm waters you can reach Sardinia in 10 to 15 hours," he said.
"The boats that have landed in the last two days have all been in excellent condition, fuelling our belief that a genuine trafficking network is being created".
Meanwhile, a new study by the multiethnic research foundation ISMU, reported that Italy's immigrant population is on the rise.
According to the annual report, there are now almost four million foreigners living in Italy, making up 7% of the population.
This is ten times as many as were living in the country 25 years ago, and the figure is expected to rise to seven million by 2016, ISMU said.
Breaking down the composition of immigrants in Italy at the start of 2006, ISMU found that 3.012 million immigrants were living in the country legally, while around 760,000 had entered illegally or had stayed after their visas expired.
The report also noted that the average age of immigrants was falling, with one in five foreigners in Italy now under the age of 16.
This development is reflected in Italian schools, where 5% of students were immigrants in 2006, compared to just 2% six years ago.
