Paolo Savona, an 81-year-old eurosceptic economist is no longer the nascent populist government's pick for finance minister, parliamentary sources told Adnkronos on Wednesday.
Savona has been replaced by the anti-immigrant League party's League's powerful deputy-secretary, Giancarlo Giorgetti, according to the sources.
The League was pushing hard for Savona to become Italy's next economy minister but his candidacy was allegedly a stumbling-block in consultations with Italy's president, Sergio Mattarella, who had reservations about the economist.
Savona called Italy's entry into the euro zone a "historic error" and wants a "plan B" to be drawn up to allow it to leave the currency bloc if it should prove necessary.
Italy has been in political limbo since the inconclusive 4 March national election in which populist forces made strong gains but no party or alliance won an outright parliamentary majority.
The League and the populist Five-Star Movement have agreed a joint plan for coalition government. Mattarella was on Wednesday meeting their candidate prime minister - little-known law professor and political novice Giuseppe Conte.
