Performed by companies including Alenia Aeronautica, Alenia Aermacchi, Galileo Avionica and Selex Communications, the ACOL upgrade introduces new GPS-guided weapons, a Rafael Reccelite reconnaissance pod, night vision goggle-compatible cockpit and navigation and identification equipment that is new to the AMX.
This project is due for completion later this year.
However, no official date has been set for the type's possible deployment to Afghanistan.
Italy is meanwhile upgrading its six air force Predator As with a Raytheon multispectral targeting system-A sensor payload, improved engine and extended wing.
A satellite communications update will also enable deployed operations of the type to be controlled from Amendola air base in southern Italy.
Three Italian-based aircraft have received the enhancements, with the remainder to be modified during 2010.
The air force is also in the process of acquiring four Predator Bs.