Police had been monitoring the group amid concerns they were becoming radicalised, with plans to join Islamist militants in Syria.
The arrests were made after raids on 12 properties, including 10 in the city centre of Venice.
Three men from Kosovo – Fisnik Bekaj, 25, Arjan Barbaj, 28, and Dake Haziraj, 26 – along with a minor were detained at an address in Calle de la Mandola.
Police said all four of the suspects held Italian residence permits and two of them were reportedly working as waiters.
The incident has raised concerns about the safety of holidaying in the popular Italian city.
Venice, also referred to as the “City of Bridges”, is a place where people walk on foot, making the Rialto a busy thoroughfare year-round.
Despite the threat, the Foreign and Commonwealth Office (FCO) has not yet upgraded its terrorism advice for the nation.
A general terror threat has been put in place for Brits travelling to Italy.
On its website, the FCO said: “Attacks could be indiscriminate, including in places frequented by foreigners.
“There are isolated cases of domestic terrorism. Attacks carried out by the extreme left-wing and secessionist groups have generally been aimed at official Italian targets, mainly in the form of small bombs and incendiary devices.
“There is considered to be a heightened threat of terrorist attack globally against UK interests and British nationals, from groups or individuals motivated by the conflict in Iraq and Syria. You should be vigilant at this time.”
There are some three million British visitors to Italy each year and most of these are trouble-free.
