Citizen street patrols
The measure goes into effect immediately but must be approved by both houses of parliament within 60 days.
It also establishes rules for citizen street patrols by unarmed and unpaid volunteers.
The move came after groups of self-styled and unregulated vigilantes began patrolling some towns, alarming police officials.
Mayors will be able to approve citizen patrols, with priority given to membership or leadership roles by retired police and soldiers on leave.
Speaking at a news conference on Friday, Roberto Maroni, Italy's interior minister, defended the measure, saying that setting up organised groups of volunteers would avoid the creation of "do-it-yourself" patrols seeking to take matters into their own hands.
Silvio Berlusconi, Italy's prime minister, earlier said that the number of sexual assaults fell 10 per cent last year compared to 2006 and 2007.
But many Italians are unconvinced, with recent rapes grabbing headlines in newspapers and television, often playing up the role of foreigners as perpetrators.
Some politicians have also reopened the debate over whether chemical castration of sex offenders should be instituted.