According to two people with knowledge of the situation, the incoming government of Mario Draghi and Intel have chosen Vigasio in the northeastern Veneto area as the preferred location for a new multibillion-euro chip facility in Italy.

The investment made by Intel in Italy is a component of a wider plan, which the American chipmaker unveiled in March and calls for up to 80 billion euros ($77.5 billion) in expenditures over the next ten years to expand capacity across Europe.

With activities expected to start between 2025 and 2027,Intel has indicated that the Italian facility would create 1,500 employment in addition to 3,500 jobs for partners and suppliers. Future expansions are envisaged after an initial investment of roughly 4.5 billion euros.

The Italian factory would be a cutting-edge semiconductor packaging and assembly facility that wove complete chips made of tiles together using innovative technologies.

The parties had outlined a comprehensive agreement in early September, according to the sources, who asked to remain anonymous due to the sensitivity of the situation. However, no official announcement would be made until after the results of Sunday's general election.

As the talks are private and ongoing, an Intel spokeswoman declined to comment. Additionally, Draghi's staff declined to comment.

The picked site from a shortlist of two locations that also includes one in the northwest Piedmont region is Vigasio, which is situated close to Verona on the vital Brenner highway and railroad.

One of the insiders stated that the location is advantageous for several reasons, including its proximity to Germany and, in particular, the city of Magdeburg, where Intel will erect two facilities.

The areas of Lombardy, Apulia, and Sicily were also first evaluated by Intel and the government as potential locations.

The sources declined to elaborate, but Reuters previously stated that Rome is prepared to support as much as 40% of Intel's entire investment in Italy.

Before any agreement is finalised, the state's participation to Intel's investment programme must be disclosed to the next administration, according to one of the sources, who also added that Draghi might permit the new administration to make the announcement.