Fiat is planning to sell up to 35 per cent of shares in Ferrari to generate cash.
Mr Paolo Fresco, Fiat's chairman and chief executive, made the announcement as he briefed the Italian parliament.
He also urged the government to approve financial incentives to buy non-polluting cars - a move that would help the group's loss making Fiat Auto unit.
The sale of Ferrari shares is part of a wider plan to reduce Fiat's net debt of euro6 billion.
Mr Fresco said Ferrari, which is 90 per cent - owned by Fiat, would initially be listed on the Milan stock exchange, with a New York listing possibly following.
He told reporters: "There's lot of pressure in New York to have Ferrari listed there, but the filing procedure takes time."
Turin-based Fiat had announced plans to sell the luxury car unit last month, after posting sharp losses and a widening debt in the first quarter.
The group's poor showing has mainly been blamed on Fiat Auto, which is 20 per cent - owned by General Motors.
Mr Fresco said Fiat had no intention of selling "strategic assets" such as its aerospace unit Fiat Avio; its light truck unit Iveco; or its agricultural vehicles unit CNH Global but he said its robotic unit Comau would be spun off.
Fiat has promised to sell assets and trim its workforce as part of a debt-halving plan worked out with three Italian banks which recently arranged a $1.7 billion loan to help the company out.
PA