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Galeazzo Bignami, a lawmaker of the rightist Brothers of Italy party who sparked outrage in 2016 after a newspaper published a picture of him wearing a Nazi swastika on his left arm, was named junior infrastructure minister on Monday.
Prime Minister Giorgia Meloni, who personally announced Bignami's appointment at a news conference, is the leader of Brothers of Italy, a group which traces its roots to the post-fascist Italian Social Movement (MSI).
She did not comment on the 2016 photo. There was no immediate comment from her party's press office on the appointment.
Meloni has repeatedly condemned the infamous racist, anti-Jewish laws enacted by dictator Benito Mussolini in 1938 and last week told parliament she "never felt any sympathy for fascism".
"I have always considered the (anti-Semitic) racial laws of 1938 the lowest point of Italian history, a shame that will taint our people forever," she said in parliament.
When the pictures came out, Bignami, 47, said he was wearing the red armband with the swastika as a joke and the pictures had been taken 10 years earlier, during his bachelor party.
Bignami, who was elected last month in parliament for a second term, has long been part of the Italian hard-right but has spent part of his political career in former prime minister Silvio Berlusconi's more moderate Forza Italia.
Bignami will serve under the right-wing League party leader Matteo Salvini, who is the infrastructure minister and deputy prime minister.
(Reporting by Angelo Amante; Editing by Howard Goller)