Former communist militant Cesare Battisti has admitted to four murders in Italy during the 1970s, according local press.
Battisti, 64, spent decades on the run and previously denied any involvement.
He was arrested in Bolivia in January after living in Brazil, and later extradited to Italy.
Milan's prosecutor, Alberto Nobili, said Battisti confessed during questioning in prison, where he is serving a life sentence.
"It is a very important recognition for the work of the magistrates, a sort of 'honour of the arms' for those who have investigated it," said Milan prosecutor Alberto Nobili.
In 1979, Battisti was convicted of belonging to a far-left terrorist group outlawed in Italy - the Armed Proletarians for Communism (PAC).
He escaped prison in 1981. Later, Battisti was convicted in absentia for killing two Italian law officials, for taking part in a separate murder and for planning another which left the victim's 14-year-old son in a wheelchair after a shoot-out.
He lived in France, Mexico, and later Brazil where he was given asylum by the country's then-president, Luiz Inacio Lula da Silva.
In January, a Brazilian court threw out his refugee status shortly after the election of far-right President Jair Bolsonaro, who pledged to have him sent back to Italy.
He has admitted being part of the PAC but previously denied responsibility for the murders.
"When I killed, for me it was a just war," Battisti reportedly said during his confession.
"I realise the harm I have done and I apologise to the families [of the victims]".