The offer, similar to those already offered in Germany and France, is set to try and revive dormant car sales and will run until the end of the year.
According to Italian media reports, new car buyers will receive 1,500 euros if they scrap a car that is at least 10 years old and replace it with a new car that meets Euro 4 or Euro 5 emission standards.
Customers who exchange their old cars for ones that are powered by compressed natural gas, LPG (liquid petroleum gas) or hydrogen will receive 3,000 euros.
France and Germany already have started offering incentives to car buyers to replace their old cars with new, more fuel-efficient models.
In Germany, people who scrap cars that are at least nine years old and then buy new, low-CO2 vehicles receive certificates worth 2,500 euros.
In France, the government is giving a bonus of 1,000 euros to people who replace their 10-year-old cars will more fuel-efficient models.