Delays in court cases are seen as deterring foreign investment, undermining confidence in the legal system and a major drag on growth in the euro zone's third largest economy.
The European Commission made part of its 200 billion euros ($204.7 billion) of pandemic recovery funds for Italy conditional on cutting the length of trials by 25% over five years in criminal cases and by 40% in civil ones.
The reform, probably the most controversial of Prime Minister Mario Draghi's 18-month premiership, proposes to scrap trials without delivering a verdict if they go on beyond a set time.
Critics say it will allow thousands of criminals to escape justice, but Justice Minister Marta Cartabia points out the reform also provides for the hiring of 15,000 clerks to lighten judges' workloads, simplifies some procedures and encourages plea bargaining to prevent cases going to court.
The decrees to reform the criminal and civil justice systems will go to parliamentary committees which can propose possible amendments. The reform must enter into force by the end of this year in order to release European funds.
The outgoing Draghi government has made justice reform part of the business it will pursue until the appointment of a new cabinet after the Sept. 25 elections. ($1 = 0.9772 euros)
(Reporting by Emilio Parodi in Milan and Giuseppe Fonte in Rome; editing by Keith Weir)
