The Italian government approved 25 billion euros ($28.93 billion) of extra spending late on Wednesday, the third major cash injection to try to support its battered economy since the start of the country's coronavirus outbreak.
The new stimulus will involve additional borrowing and drive the 2020 budget deficit to 11.9% of national output, versus a goal of 10.4% set in April and a figure of 1.6% reported in 2019, the lowest in 12 years.
Rome sees its public debt rising to 157.6% of GDP this year.
"It is essential to continue to support the productive system and the income of citizens," the prime minister's office said in a statement after the cabinet approved the move at a meeting that ended around midnight (1000 GMT).
The package will help tide over Italy while it awaits more than 200 billion euros in grants and cheap loans from the European Union's Recovery Fund, which EU leaders approved this week.
The government has said it will present the measures in an emergency decree early in August, following a parliamentary vote on July 29 to authorise the deficit hike.
Part of the extra spending would be used to allow people to pay taxes in installments, rather than a single payment now due in September, Economy Minister Roberto Gualtieri told parliament earlier on Wednesday.
The extra funds will conditionally extend financing for temporary layoff schemes for a further 18 weeks, a government source said. Companies hit hardest in the first half of 2020 will be entitled to extend the scheme so as long as they do not cut back their workforce.
The new stimulus measures come on top of the 75 billion euros Rome has already deployed to help businesses and families.
Overall, the government has set aside about 180 billion euros, including state guarantees for bank loans, though only part of this is expected to be spent.