Italy's parliament has given final approval to a controversial bill proposing major constitutional reforms - the first in 60 years.
Mr Berlusconi's opinion poll ratings have dropped recently
The Constitutional Reform Bill will eventually devolve extensive powers from Rome to Italy's 20 regions and cut the number of MPs in both houses.
It also strengthens the powers of the prime minister.
The Senate - or upper house - endorsed the bill by 170 votes to 132 on Wednesday evening.
It has been pushed through parliament at the behest of the small but influential Northern League political party - a key member of Prime Minister Silvio Berlusconi's governing coalition.
The Northern League is headed by Umberto Bossi, who suffered a heart attack nearly two years ago, forcing him to give up his cabinet post.
He returned to Rome for the first time since his illness to take part in the vote.
The left-wing opposition leader Romano Prodi said it was a sad day for Italy.
The opposition plans to call a national referendum to repeal the reform bill before any major changes actually take effect under the new law.
The major transfer of power to the regions is not due to take place until 2012 and certain other constitutional changes are not due to be implemented until 2015.
Under the reform bill, the powers of the prime minister will be increased, enabling him or her to hire and fire ministers and to dissolve parliament.
The powers of the figurehead president will be reduced and the Senate will become a federal body.
The regions are set to take over decision-making from Rome regarding education, health and local policing.
The bill's supporters say it will reinvigorate Italy's system of government, tackling the problem of weak, short-lived administrations.
Opponents claim it will only increase the economic gap between Italy's industrialised north and the much poorer south and will harm national unity.