Franco Frattini, Italy's foreign minister said its 3,400 troops will have left the country by 2014.
The Italian decision follows the withdrawal of Dutch troops earlier this year and the Canadian decision to leave next year, as commanders struggle to sure up an alliance which is still short of troops.
Nato commanders have found it increasingly difficult to persuade members to stay in Afghanistan in the face of mounting death tolls and domestic opposition.
Mr Frattini spoke as Italy mourned four Italian soldiers killed at the weekend when their convoy was blown up in western Afghanistan.
He said: "To the families of our soldiers who died a heroic death I want to confirm that there's a political plan for Afghanistan, that their loved ones have not been sent to certain defeat in an impossible mission."
"That's with a timing that has yet to be decided: summer 2011 for the start of a gradual drawdown of troops, with the intention of completing it by 2014," he told an Italian newspaper.
Barack Obama's announcement that American troops will also begin returning in July 2011 has been criticised for giving the Taliban hope they can simply wait for Nato to leave.
The Nato mission is still short of several hundred soldiers to train the Afghan forces supposed to replace them and Nato officials have been trying to persuade alliance members to stop announcing withdrawal dates.
