It is the highest sum ever mobilised under the EUSF in a single instalment.
The issue will be discussed and voted on at a meeting of the budgets committee on Wednesday.
Between the end of August 2016 and mid-January 2017, a series of strong earthquakes led to 333 casualties, 30,000 people needing assistance and significant damage to infrastructure, businesses and living conditions of the affected population in Central Italy.
The EPP group rapporteur on the committee, Italian deputy Giovanni La Via, said, "The EU has promised to help Italy face this tragedy and I am proud to say that we are delivering on this commitment.
"The €1.2bn is the biggest ever mobilisation of the EU solidarity fund, and this sizeable amount of money will be used to help the people of Umbria, Lazio, Marche and Abruzzo, dramatically affected by the earthquakes, to start thinking about a new future, and it will help the reconstruction efforts undertaken by our government and local authorities," said La Via.
The MEP added, "In the last days we have unfortunately witnessed other natural disasters across Europe, among them earthquakes in Malta and Ischia. This parliamentary vote shows the EU expressing solidarity through concrete actions and financial support."
The European Commission, meanwhile, has already helped mobilise firefighting aircraft for Italy, through the EU civil protection mechanism following another request by the country for assistance to battle forest fires.
Responding to the request, France offered three planes (two Canadairs and a reconnaissance aircraft). It is the third time Italy has received EU support to manage forest fires this summer.
Italy has also received support from the EU's emergency Copernicus satellite to provide mapping to the national civil protection authorities.
Speaking in Brussels on Tuesday, Christos Stylianides, the European Commissioner for humanitarian aid and crisis management, said, "The EU stands in full solidarity with Italy.
"Throughout what has been a particularly difficult summer, we have been thoroughly committed to helping countries deal with forest fires."
He added, "Our civil protection mechanism has been put into action once again and I thank France for their swift offer of assistance to Italy. Our thoughts remain with the brave first responders and those effected by the fires, and we stand ready to provide further assistance if requested."
The EU civil protection mechanism has been activated multiple times this summer by several countries across Europe.
On Tuesday, the Commission said its 24/7 emergency response coordination centre is closely monitoring forest fire risk across Europe and has already supported Portugal, France, Italy, Montenegro and Albania during the summer.
A Commission spokesperson said, "In addition, and as national capacities are overstretched in many countries, the Commission is co-financing 85 per cent of related transport costs to countries offering support through the civil protection mechanism during this critical time in the Mediterranean basin."