Oak chips cannot be used in Italy to artificially age certified DOC and DOCG wines, the Agriculture Ministry said on Thursday.
Last month the European Union authorised the use of the chips, as opposed to letting wine age in barrels, but allowed member states to place restrictions in regards to making quality wines.
On Thursday, Italian Agriculture Minister Paolo De Castro issued a decree stating that the chips cannot be used to make wines which have the DOC and DOCG certification.
The DOC guarantees the origin of a wine while DOCG guarantees the origin and quality of the wine.
According to De Castro, banning the use of oak chips for DOC and DOCG wines will ensure a future for quality wines.
"We do not want to cut costs by adopting methods, like wood chips, which damage the image and quality of the product, " De Castro said.
The use of wood chips to artificially give wine an aged barrel flavour is commonly used in the United States, South Africa, Australia and South America.
The EU gave its green light to their use in order to help European winemakers be more competitive.
However, the EU also made it obligatory to indicate on the label whether chips were used and banned the use of such terms as 'fermented', 'aged' or 'matured in barrels' from these labels.
The EU also set precise guidelines on the quality of the chips, which must be in their natural state without any chemical or biological additives or treatments.
According to the Coldiretti farmers' union, Italy has adopted a winning policy of focusing on quality, which has helped boost wine exports to the United States by 8.5% in the first eight months of the year, over the same period in 2005.
"Italian wines made without oak chips are clearly in the lead over their Australian rivals which use this practice," the union said.
Italy holds a 31% stake of the foreign wine market in the US compared to 29% for Australia, which Coldiretti said was selling its wines at cut-rate prices in order to compete.
Wine is Italy's biggest food export to the US, which imports about one quarter of Italy's production in terms of value.
