Under new laws approved by the Senate, illegal immigrants convicted of crimes will now face jail sentences a third longer than those for Italians, BBC announced.
Courts will be able to jail illegal immigrants for up to four years rather than simply deport them.
Property rented to illegal immigrants can also be confiscated.
Both the Catholic Church and Italy's left-wing opposition say that, as well as targeting immigrants unfairly, the new laws may also encourage racism.
The period of detention for illegal immigrants waiting to be deported has been increased from 60 days to 18 months - in line with recently introduced European Union anti-immigration guidelines.
The package includes measures to counter drink-driving and organised crime, and allows soldiers to patrol the streets alongside the police.
The laws were approved by the Senate by 161 votes to 120 on Wednesday, with eight abstentions, after approval in the lower house last week.
Mr Berlusconi had introduced the decree shortly after being elected in April on a platform that included a promise to crack down on crime.
The Senate was addressed by the anti-immigrant Northern League party's Sandro Mazzatorta, who linked immigration to criminality.
"Foreigners committed 60% of the attempted homicides, 60% of the robberies (and) 82% of the muggings," he said, referring to last year's figures from the city of Brescia.
But creating harsher sentences for illegal immigrants undermines the "principle of equality" outlined in the Italian constitution, according to opposition Senator Anna Finocchiaro.
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