The 54 million euro ($A88 million)-valued Garibaldi entered service in 1985, took part in various operations in the Mediterranean area and off Africa, including missions in Lebanon, Libya and Somalia, then was placed in reserve in 2024.
"Structural wear and the obsolescence of onboard systems" mean it "no longer meets current capability and operational requirements," according to a government document.
A parliamentary report said transferring the carrier to Indonesia would save Italy maintenance costs estimated at around five million euros only for last year or the nearly 19 million euros required for dismantling.
Defence officials in Jakarta say accepting the donation would be more time-efficient and cost-effective than buying a new ship, and could be useful for aid distribution in disasters, according to Indonesian media.
Rome aims to finalise the donation by December.
It is part of a broader strategy to expand business with Indonesia. Prime Minister Giorgia Meloni's government is seeking to finalise Italian submarine and aircraft sales to Indonesia worth about 1.5 billion euros, the document said.
"It is a reasonable operation. Military and industrial cooperation brings returns, including on the political front and in other economic dossiers," said Alessandro Marrone, a defence expert at Rome's Istituto Affari Internazionali.
Last year shipbuilder Fincantieri delivered two combat ships to the Indonesian navy under a deal worth $US1.2 billion.
Italian opposition groups have criticised the plan.
Members of the lower house defence committee from the Five Star Movement and the Democratic party voted against it, citing a lack of information.
Last month, the regional council in the southern Puglia region - where the Garibaldi is currently berthed - urged the government not to approve the donation and instead turn it into a museum at the port of Taranto.
