Italy was ready to allow its jets to take “targeted military action”, he said in a statement.
Earlier, a Nato air strike badly damaged buildings in Libyan leader Col Muammar Gaddafi’s compound in Tripoli.
Nato is enforcing a UN resolution to protect civilians in Libya amid a revolt that began in February, inspired by other uprisings in the Arab world.
Mr Berlusconi announced the decision after a telephone call with US President Barack Obama, and would also call other European leaders to brief them personally, said his statement.
Italy had previously said it would not take part in Nato-led air strikes, citing its 40-year colonial rule of Libya.
Nato split
The UK has for weeks called for more commitment from Nato members to the operation in Libya, but on Monday Russia said the Western military intervention risked fanning a series of civil wars across the Middle East.
Russian Foreign Minister Sergei Lavrov said Western nations had sided with the Libyan rebels, leading to an expectation among rebel groups in the Middle East that foreign countries would help them to overthrow their governments.
“This creates a very dangerous mood,” said Mr Lavrov.
“Unfortunately, it is probably contagious and it’s popping up amongst protesters in other countries of this region with the hopes that they just need to aggravate the situation and then the international community will come to help, will take their side.”
Russia abstained from March’s UN resolution authorising a no-fly zone to protect civilians, and correspondents say the Kremlin feels Nato’s bombing campaign has gone beyond what the resolution is designed to do.
Italy, France and Britain last week agreed to send military advisers to assist the Benghazi-based rebel Transitional National Council (TNC) in its battle against pro-Gaddafi forces.
The US launched its first Predator drone strikes pro-Gaddafi military positions over the weekend, which the Libyan government denounced as crimes against humanity.
‘Agents, traitors and spies’
In some of the latest air raids by Nato jets, at least two missiles reportedly struck the Libyan leader’s sprawling Bab al-Azizia compound early on Monday.
Correspondents said the blasts they caused were among the biggest explosions in the capital so far.
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