BRUSSELS—The European Commission on Sunday authorized Italy to use government guarantees to create a precautionary liquidity support program for their banks, a spokeswoman for the European Union's executive arm said, adding that the program was approved under the bloc's "extraordinary crisis rules for state aid."

The liquidity support program includes up to €150 billion ($166 billion) in government guarantees, said an EU official.

The commission spokeswoman declined to comment on the amount of guarantees that were authorized, but said that the budget requested by the Italian government had been found to be proportionate. The Italian economy ministry declined to comment.

The spokeswoman said only solvent banks would qualify for the liquidity support program, which has been authorized until the end of the year.

"There is no expectation that the need to use this scheme should arise," the spokeswoman said.

The decision, which was taken on Sunday and hasn't previously been disclosed, appears to be a first indication of governments moving to shore up banks in the wake of market turbulence following the Brexit referendum in the U.K.

"As this decision and other precedents demonstrate there are a number of solutions that can be put in place in full compliance with EU rules to address market turbulence," the spokeswoman said.

Giovanni Legorano contributed to this article.

Write to Valentina Pop at valentina.pop@wsj.com and Gabriele Steinhauser at gabriele.steinhauser@wsj.com

(END) Dow Jones Newswires

June 30, 2016 11:05 ET (15:05 GMT)