Italia is set to sell its largest asset in Europe, the Hanes Mall in Florence, which was built in the 1920s, for about €2.5bn.
It is the latest step in the country’s economic recovery, which has been aided by the fall in inflation.
It will also see a significant reduction in the cost of living.
The sale of the mall is part of a strategy to help the country achieve its ambitious 2020 target of spending 2% of its gross domestic product on infrastructure and social services.
“This is a historic day for the Italian economy and for the country, which is already on track to achieve the second biggest reduction in public debt in the European Union after the UK,” Prime Minister Matteo Renzi said.
“It is a sign of how important it is to invest in the economy and the city, and to be bold and ambitious.”
The sale is part-funded by the state, which owns the building, which will be turned into offices and a sports centre.
Renzi announced the sale on Monday, saying he had received the go-ahead from the city’s mayor, Luigi Bongiorno.
He also said he had appointed the first minister of the southern city of Bologna, Federico Della Valle, as the new president of the city council.
The former Hane Mall was the world’s largest shopping centre before it was torn down in 1999.
It was sold off to the city of Milan for €5.6bn, and the neighbouring Lido shopping centre is also part of the sale.
Renzian said he hoped the sale of Hanes would help the city move towards a cleaner, more attractive image and make the city more attractive for tourists.
He said it would also help the region in terms of tourism and create jobs.
“We are moving in the right direction, we are on the right track, we will continue to build the country,” Renz said.