The measure, first imposed on a trial basis in 2007, is triggered whenever pollution exceeds the statutory limit for 12 consecutive days.
Satellite imagery shows Milan to be one of the most polluted cities in Europe.
An estimated 120,000 vehicles will be affected by the move, according to the Corriere della Sera newspaper.
The most polluting vehicles have been banned from driving through the city centre since Thursday.
The ban is imposed when pollution exceeds 50 micrograms of particulates per cubic metre of air over 12 days. The last time the full ban was in force was in February.
The move is not popular with all environmentalists, who argue that the city's public transport system should be improved to discourage people from using their cars.
Public transport will be bolstered during the day, with an extra metro trains and buses operating.
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