The left-wing partnership, dubbed +Europa or More Europe, will go to the polls in March on an explicitly pro-EU platform.
Leaders say they have a “responsibility to give next generations a future called the United States of Europe.”
The centrist Democratic Centre party, which already has a presence in the Italian parliament, will form a large part of the alliance.
Its leader Bruno Tabacci met chef of the Italian Radicals, Emma Bonino, yesterday to agree the coalition.
The coalition will now be formally established on January 13 at an assembly meeting.
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Ms Bonino told Mr Tabacci: “Thanks to your choice, you have made possible a democratic option for us and the country.
“+Europa will be the only pro-European coalition for the next elections.”
A third party, Forza Europa, led by Benedetto Della Vedova will also join forces with the pair.
In a statement on their website, the coalition announced: “We are Italian citizens, convinced that in order to face the great issues of our time, we need broader answers that can only be given by a more European Italy in a more united and democratic Europe.
“We are committed to ensuring that Italy is finally a key player in Europe, rediscovering full financial stability and capacity for growth, enhancing and attracting talent and creativity, freeing vital energies from too many corporate and ideological constraints, establishing itself as a place for rights.
“It is time to say that to look at the future of Italy, we need Europe.”
More Europe will take on a number of other parties including a likely right-wing coalition led by Silvio Berlusconi.
The former prime minister is locked in talks with the Eurosceptic Lega Nord group about forming an alliance.
If that happens, polls currently show they could grab 40 percent of the vote and seize power in Italy.
Lego Nord has a number of policies that have alarmed Brussels chief, including opposition to the single currency.
Leader Matteo Salvini has claimed the Euro is a failed experiment that is heading towards “catastrophe”.
Additional reporting by Maria Ortega.