The virus was found in swans in Italian regions of Puglia and Calabria in southern Italy, and Sicily, Health Minister Francesco Storace said.
Storace did not say exactly how many birds had been infected by the virus but he acknowledged that most of 17 swans that were found dead were infected by H5N1.
"It's certain that the virus has reached Italy," the Associated Press reported Storace as saying after he briefed the Cabinet on the situation.
News media said no human cases of infection have been reported in Italy.
Greek authorities said the deadly strain of bird flu was found in northern Greece, according to television reports.
On Friday, health officials in Azerbaijan say H5N1 was found in dead birds on the country's Caspian Sea coast. State-run Lider TV reported that a London laboratory confirmed the results.
Meanwhile, Nigerian authorities said they are mounting battle against the virus, which has been detected in two more states, and has so far killed more than 100,000 birds. This is the first time the strain has been found in Africa, although no human infections have yet been reported in Nigeria.