Culture Minister Alberto Bonisoli, of the ‘anti-establishment’ Five Star Movement, announced the new law on Friday.
“With this decree, we are pushing some films to go directly, or more rapidly, towards easier commercialisation,” Bonisoli said.
At the same time “it's important to protect theatres, which to keep operating need films that can guarantee an income.”
The law requires all Italian-made films to be shown in cinemas before they are streamed, and is being described as “anti-Netflix” by Italian press.
It will affect Italian Netflix productions like Sulla mia pelle, the Netflix film that shocked Italy this year with a true story of suspected police brutality.
The law enshrines the current practice of a 105-day delay between cinema release and streaming release. It adds some flexibility, as the delay can be slashed to 60 days for films shown in fewer than 80 cinemas or viewed by fewer than 50,000 people in the first three weeks.
There were complaints from many in Italy’s film industry after this year's Venice Film Festival, where several films came from US streaming giants Netflix or Amazon, including the festival's Golden Lion winner “Roma”.
Several famous directors attended with made-for-streaming films, including the Coen brothers, Paul Greengrass and Cuaron.
Italy's film industry slammed what it saw as an attack on cinemas, saying that any festival winner should be available to a broader public than just Netflix subscribers.
They appealed to Bonisoli to rule on the matter and introduce a law stipulating a “statutory window” between cinema and streaming release.
The head of Italian showbusiness association Agis, Carlo Fontana, said that the new law protects against “unfair competition (from streaming services), which could have created a dangerous short-circuit”.
“Streaming giants like Netflix make a lot of money in Italy without creating any jobs, while their (budget) policy is far from transparent,” said Francesco Rutelli, a former mayor of Rome who presides over Italy's cinema and audiovisual association Anica
Nevertheless, he told the Il Messagero newspaper, “blocking the path of Netflix or other platforms, which will only increase in numbers, is as illusory as it is useless.”