Nine women say they were assaulted by groups of young men in Milan's main square during the celebrations.
Two people have been arrested as part of a wide investigation into suspected gang sexual assaults in Milan.
Nine women said they were assaulted by groups of young men during New Year's Eve celebrations in the city's main square, the piazza Duomo.
Italian police announced on Tuesday that they had identified around 20 suspects -- including three minors -- aged between 15 and 21. Prosecutors say some of the men were either foreigners or Italians of North-African origin.
Two young men were arrested on Wednesday in Milan and Turin, they added.
One of the suspects is accused of sexually assaulting two young women and stealing from a third. The second detainee is accused of sexually assaulting four young women and stealing from a fifth.
The Italian interior ministry said authorities had also seized computer equipment and clothing linked to the attacks from the homes of the two men. One of the suspects has said he had "done nothing" and denied touching the women.
Among the nine victims who came forward were two 20-year-old German tourists, according to the Italian news agency ANSA.
"We tried to fight them off, my friend hit and slapped them but they were laughing and continued to assault us. I had 15 hands on me," one of the victims told ANSA. The victims have also claimed that nearby police officers did little to help them.
A video published by local media appears to show a group of men surrounding two young women who were pinned against police barriers.
The case has generated headlines across Italy and has evoked memories of similar attacks in Cologne on New Year's Eve in 2015, where groups of young men attacked dozens of women in squares and clubs.
The attacks in Lombardy have also fuelled debate in Italy on violence against women in a country where at least one woman is killed nearly every week -- often by a current or former partner.
"The events in Milan are extremely serious and the Public Prosecutor's Office has immediately begun investigations to identify those responsible for the harassment and violence," said Italian Interior Minister Luciana Lamorgese.
"The police forces are committed on a daily basis to guaranteeing the security of our cities. The effort will have to be maximum to avoid the repetition of similar deplorable behaviours".