The land is next to Villa Torlonia, which was the home of Fascist dictator Benito Mussolini until he was ousted from power in 1943.
It has also been announced this week that local architects Luca Zevi and Giorgio Tamburrini have won the competition to design the museum.
Once the council approves the £4 million project in September, construction will begin on the 3,000m 2area, the council said in a statement.
The museum will show documentaries and other audio-visual material from the Shoah Foundation, established 10 years ago by Hollywood director Steven Spielberg. It will testify to such wartime massacres as the 1944 killing of 335 civilians in the Ardeatine Caves outside Rome.
The museum is expected to open as early as 2006.