Monte dei Paschi's shares have not traded in Milan since December 2016, when the bank failed to raise capital from investors and had to seek help from the state ahead of an 8 billion euro (£7.1 billion) rescue.

The source said Italy's market watchdog Consob would likely approve the prospectus for the re-listing of Monte dei Paschi's shares in the second half of next week, paving the way for the stock to resume trading the following week.

By then the bank will have published its nine-month results, which the board meets to approve on Oct. 27.

In August, the Italian government paid 6.49 euro a share to inject 3.85 billion euros into the bank, gaining a 52.2 percent stake.

Last month, the stock was valued at 4.28 euros during an auction held to determine the payment due to investors who bought insurance against Monte dei Paschi's default.

The 4.28 euro price entails a paper loss of 1.3 billion euros for Italian taxpayers.

(Reporting by Elisa Anzolin and Valentina Za, editing by Luca Trogni and David Evans)