Brand owners that infringe the law could face jail sentences, as well as fines ranging from €1,000 to €100,000 (£700-£70,000). The Italian police will be required to monitor ambush marketing activity in the run-up to the event.
The move follows pressure for more protection for official sponsors from the International Olympic Committee.
The governments of Olympic host cities have been required to legislate against ambush marketing since the Atlanta Olympics in 1996, which was besieged by non-sponsors.
Ambush marketing was criminalised for the 2003 Cricket World Cup in South Africa and for Euro 2004 in Portugal, although the approach was slammed for being too harsh.
The UK government recently presented a draft bill to Parliament in preparation for the London Olympics in 2012, which would make ambush marketing a civil offence. Media bodies have criticised the proposed legislation as too strict, despite it being softer in stance than the law introduced in Italy.
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