Italy says it will go to the International Court of Justice in The Hague ito contest Brazil's decision not to extradite an Italian fugitive.
Italian PM Silvio Berlusconi expressed "great regret" at Brazil's Supreme Court ruling over Cesare Battisti.
Battisti was released from prison in Brazil following the court's decision.
The former left-wing rebel escaped from an Italian jail in 1981, while awaiting trial for four murders in the 1970s. He has always denied the charges.
He was convicted of murder in absentia in 1990, but the 56-year-old insists he is the victim of political persecution in Italy.
Former Brazilian President Luiz Inacio Lula da Silva denied Italy's extradition request a day before he left office in January - a move that caused outrage in Italy, which withdrew its ambassador.
'Blood and friendship'
Silvio Berlusconi said Brazil's decision on the extradition request "denies justice to the Italian people and in particular to Battisti's victims".
Italian Foreign Minister Franco Frattini said: "Italy plans to activate immediately every possible judicial mechanism... in particular through the Hague international court."
He said Italy would "seek to overturn the decision that it holds is not in accordance with... the requirements of international law".
The nine Supreme Court judges voted 6-3 to confirm ex-President Lula's decision to deny the extradition.
They ruled that the decision complied with a bilateral treaty, and that Italy did not have have the legal standing to challenge the former president's decision.
"At stake here is national sovereignty. It is as simple as that," said Judge Luiz Fux, one of the nine.
But Mr Frattini said the decision "appears to breach international agreements between the two countries, as well as the profound and age-old blood and friendship ties".
Battisti has been a fugitive since escaping jail in Italy - living for many years in France, where he started a career as a novelist, before moving to Mexico and finally Brazil.
Battisti was released from the Papuda maximum-security prison within hours of the ruling.
Italy says the former member of the radical Armed Proletarians for Communism (PAC) is a terrorist.
Battisti insists that he is guilty only of being involved in "an armed group with a subversive aim and of having carried weapons", not of shooting anyone.
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