Steve Robinson's men still have three games left to play in Group Nine but even if they were to win all three they would not have enough points to qualify for the play-offs.
It has been a dire qualifying campaign for Northern Ireland, who have now lost all five of their games and scored only a single goal in the process.
Federico Viviani opened the scoring for the Italians in the 27th minute and late goals from Antonio Rozzi and Andrea Belotti sealed the win.
Italy took the lead as Josh Carson brought down Viviani and the Roma man fired home from the resulting free-kick.
Rozzi doubled the lead four minutes from time as he converted Salvatore Molina's pass and just two minutes later Belotti rounded off the scoring.