The decision was taken late on Tuesday, after more than five years of debate.
The idea to restrict cruise ships in Venice was first mooted in the wake of the Costa Concordia shipwreck, off the coast of Tuscany, in January 2012.
While cruise ships above 96,000 tonnes are currently banned from the Venice lagoon, new regulations will let them dock at the industrial port of Marghera, following a route quite distant from Venice city centre.
Mid-sized cruisers in the 55,000-96,000-tonne range will be made to follow the same route, but might be allowed to proceed from Marghera to the tourist port of Venice, provided that a connecting canal is upgraded, the transport ministry said.
Only cruise ships that are under the 55,000-tonne threshold will continue passing by the Giudecca Canal, which connects St Mark’s Basin to Venice’s tourist port, the ministry said.
The new rules should be operational within “about three years”, it added.
“After many months of study and very serious work, we have found a real solution,” Transport Minister Graziano Delrio said in a statement. “It is possible to develop the port, to allow the cruise ships in, without jeopardising Venice’s heritage.”
Cruise ship traffic to Venice has boomed in the last 15 years, along with overall tourist flows, creating employment but also leading many to question whether the fragile city could sustain ever-increasing tourist visitor numbers.
Mayor Luigi Brugnaro hailed the latest decision and stressed the importance of the cruise ship industry for the local economy.
The Cruise Lines International Association (CLIA), an industry group, was also satisfied with the decision.
The new regulations “meet our twin goals of the long-term protection of Venice’s heritage and an assured future for the valuable cruise economy of Venice and the Adriatic”, the CLIA said, calling for work on canal upgrades to start “as quickly as possible”.
On the other hand, anti-ship campaigners spoke of “the worst possible solution”.
Tommaso Cacciari of the No Big Ships Committee told RAI public radio that cruise ship traffic would “even double” with the opening of Marghera port to tourist vessels.
