Senators on Thursday backed the premier's conservative coalition in a 170-117 vote, clearing the last hurdle before the new cabinet is fully empowered.
It came a week after Berlusconi briefly resigned and reshuffled his government in a bid to end bickering among his allies following an embarrassing defeat in regional elections.
In a 30-minute address to the Senate prior to the vote, the prime minister promised tax cuts for businesses and a new push to lift Italy's poorer south, as well as help for families whose buying power he says has decreased since the introduction of the euro.
With elections just a year away, Berlusconi still faces economic problems and fallout from the controversial shooting of an Italian intelligence agent by US forces in Iraq last month.
Berlusconi did not mention the shooting in the Senate speech, but spoke extensively about the economy.
The effort to revive the conservative coalition's momentum comes amid calls to bring home Italy's 3000 troops in Iraq.
Berlusconi did not mention the
Sgrena episode in his speech
The outcry follows reports that the US had absolved its soldiers of blame in the 4 March shooting death of intelligence agent Nicola Calipari at a US checkpoint on Baghdad's airport road.
Calipari, who had just helped free kidnapped journalist Giuliana Sgrena and was escorting her to safety when he was shot, became a hero in Italy, where people strongly oppose the war in Iraq.
Sgrena and another Italian agent who was driving the car survived the shooting.
Berlusconi has put his government's prestige on the line with assurances to the nation that full light would be shed on the shooting.
Any public finding seen to absolve the US soldiers would likely undermine his credibility.
When the premier reluctantly resigned last week, he ended Italy's longest-serving postwar government after four years.
But he swiftly formed a new cabinet, hoping the reshuffle would stop bickering that threatened to blow apart his coalition.