Mr Berlusconi's new government will be Italy's 62nd since World War II.
Italy's Prime Minister-elect, Silvio Berlusconi, has formed a new government following his centre-right alliance's victory in April's general election.
EU Justice Commissioner Franco Frattini is to return as foreign minister, while Mr Berlusconi's old ally, Giulio Tremonti, will be economy minister.
Umberto Bossi, the leader of the anti-immigrant Northern League party, will be minister in charge of reforms.
Mr Berlusconi and his 21-member cabinet will be sworn into office on Thursday.
Correspondents say his new government faces daunting challenges such as reviving Italy's ailing economy and finding a solution to the untreated rubbish mountains in Naples.
President Giorgio Napolitano formally gave Mr Berlusconi a mandate to form a new government, Italy's 62nd since World War II, at the presidential palace in Rome on Wednesday evening.
NEW ITALIAN CABINET
Prime Minister: Silvio Berlusconi
Foreign affairs: Franco Frattini
Interior: Roberto Maroni
Justice: Angelino Alfano
Economy: Giulio Tremonti
Defence: Ignazio La Russa
Economic development: Claudio Scajola
Education: Maria Stella Gelmini
Agriculture: Luca Zaia
Environment: Stefania Prestigiacomo
Infrastructure: Altero Matteoli
Health and labour: Maurizio Sacconi
Culture: Sandro Bondi
Federalist reforms: Umberto Bossi
Afterwards, Mr Berlusconi announced that he had appointed members of both the People of Freedom party - a merger between his Forza Italia party and the post-fascist National Alliance (AN) - and the Northern League to key portfolios.
As expected, Mr Tremonti and Mr Frattini were appointed to the same posts which they held during Mr Berlusconi's second term of office between 2001 to 2006.
Mr Berlusconi's closest aide, Gianni Letta, meanwhile returned to his previous job of cabinet under-secretary. Another aide, Sandro Bondi, will be culture minister.
The Northern League, an ally which was more successful than expected in the election, features prominently in the new cabinet.
Its firebrand leader, Mr Bossi, will be able to pursue his plan for greater autonomy for Italy's more affluent north, while another senior official, Roberto Maroni, will be the country's new interior minister.
Their party colleague, Roberto Calderoli, whose provocative comments on Islam have sparked anger in Italy and Libya, has been made minister of "legislative simplification".
The National Alliance's Altero Matteoli, 67-year-old former minister, was given the infrastructure portfolio, but it was not combined with transport and environment as had been predicted.
His party also did not get the welfare ministry it had demanded.