Mr Tajani said the cash would be used to “to promote an agreement between the two rival Libyan governments in Tripoli and Benghazi” and to neighbouring Niger and Chad to help them close the Libyan corridor.
He called for the creation of United Nations-run registration centres where migrants could be fed and sheltered while their claims for asylum are screened.
Mr Tajani said: “Europe gave Turkey £5.5bn to close the Balkan route. Now it’s the moment to do the same with Libya.”
Italy is bearing the brunt of the European migration crisis with almost 100,000 people arriving on its shores between January and June.
Authorities are struggling to cope and efforts to promote integration have become strained.
And Mr Tajani warned a long-term financial investment of up to £55billion will eventually be needed to stem the flow of migrants from Africa.
He said: “We need £50bn to £55bn in fresh money, which by leveraging the private sector could mobilise up to £500bn.”
The European Parliament President said such vast sums were needed to help tackle the root of the migration crisis by strengthening African economies.
Mr Tajani was speaking ahead of talks in Paris where France, Germany, Italy and Spain and key African countries in the migration crisis Libya, Chad and Niger, agreed a “short-term plan of action”.
French President Emmanuel Macron said the proposals addressed as a matter of urgency the people-smugglers who he said had turned the Mediterranean into a “cemetery”.
Mr Macron said the migration crisis was a “challenge for the European Union and the African Union” that needed to be approached with “solidarity, humanity and efficiency”.
He also called for an injection of EU cash to help African countries deal with asylum-seekers who have returned from Europe and to prevent further migration flows.