Fall Mamour, 39, an imam in the small northern town of Carmagnola, has gained national notoriety in Italy in past months for his statements in support of Usama bin Ladin and for his predictions of Islamic armed groups' attacks on Italian targets.
"He was already known to authorities as somebody who received suspect funds," the ministry said on Monday.
"In addition, for a long time, and even more so since the slaughter of Italian soldiers in Nasiriya, he has launched dangerous initiatives, especially in the present context of international terrorism."
The ministry said he would be expelled within days. The ministry gave no further details on the "dangerous initiatives".
Bin Ladin pact
A bombing last Wednesday at an Italian military base in the southern Iraqi city of Nasiriya killed 19 Italians and nine Iraqis.
Since the Nasiriya bombing, several national newspapers have published stories on a series of predictions Mamour made weeks before the attack, in which he said an assault on Italians in Iraq would be followed by further strikes in Italy.
Mamour has lived in Italy for 11 years. He has made several controversial television appearances, including one where he said he had once fought alongside bin Ladin and was linked to the al-Qaida leader by a "blood pact".
Italy's Muslims number around 700,000, a little over 1% of the population. The ltalian state has formal agreements that recognise 10 religions, including the dominant Catholic church, but not Islam.