Italy's new Justice Minister has announced plans to free thousands of prisoners from jail this week in an attempt to ease overcrowding and save the cash-strapped country millions of dollars.

Paola Severino's plan would release some 3,300 prisoner with 18 months or less to serve on their sentences. The released prisoners with serve the remainder of their jail terms under house arrest.

The move is expected to save almost $495,000 per week which can help boost the country's ailing economy, balance the budget and cut spending. The releases will also make more room for the 68,000 prisoners serving time in Italy's 206 jails.

Non-violent prisoners in Italy are often released from prison early and convicts sentenced to three years or less frequently are given house arrest.

Last year, then-Prime Minister Silvio Berlusconi released 4,000 prisoners with less than one year left in jail to serve out the remainder of their sentences under house arrest.