The loan would shore up TIM's finances as CEO Pietro Labriola works on a revamp plan for the debt-laden group centred on the separation of its wholesale fixed network operations from services businesses.
The parties agreed to reduce the size of the financing from the 3 billion euros initially discussed due to a drop in TIM's expected financial needs, the sources added, speaking anonymously due to the sensitivity of the matter.
Under a temporary easing in European Union rules on state aid, Italy's credit export agency SACE is able to provide guarantees covering up to 80% of loans granted to large companies facing difficulties due to the COVID-19 pandemic.
The aid scheme runs until the end of this month and has already allowed SACE to provide guarantees on around 36 billion euros in bank loans to large Italian companies, according to Treasury data as of mid-June.
The sources said Economy Minister Daniele Franco was expected to sign off on the decree granting TIM the state guarantee this week.
The loan will be provided by a group of banks comprising Italy's UniCredit, France's BNP Paribas and Credit Agricole, as well as Spain's Santander, which have authorised it pending Rome's approval.
The Italian government will guarantee 80% of the sum, one of the sources added.
TIM declined to comment.
SACE's board cleared the state guarantee on May 10 without making its decision public, Reuters reported last month.
As part of a revamp plan to be presented to investors on July 7, Labriola is considering an outright sale of TIM's domestic landline grid and international cable unit Sparkle, sources have previously said.
TIM is discussing a potential deal with state lender Cassa Depositi and Prestiti (CDP), after they reached a non-binding accord last month to create a unified broadband champion in Italy combining TIM's network assets with those of CDP-controlled rival Open Fiber.
($1 = 0.9447 euros)
(Editing by Mark Potter)
By Giuseppe Fonte and Valentina Za