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Once you have your work visa, this will allow you to enter Italy to work, but you will also need a residence permit (permesso di soggiorno) to live there while you work. Australians must apply for the permesso di soggiorno within 8 days of entering Italy.
Australian passport holders must leave Europe's Schengen area, which covers most of the Continent, after a stay of 90 days. Returning to the area is only possible after another 90 days. If you want to return to the Schengen area, you could spend that time in a non-Schengen country.
If you're an Australian citizen aged 18-35 years old, you are likely to be eligible for an Italian working holiday visa. This allows you to stay in Italy for up to 12 months while working during some of your stay to help fund your trip.
The maximum permitted stay of 90 days cannot be extended except for documented reasons of force majeure. Foreigners who enter or stay in the territory of the Italian state in violation of immigration regulations are punished with a fine of €5,000.00 to €10,000.00 (Article 10-bis Legislative Decree 286/1998).
Outside of the EU, citizens of 60+ countries, including citizens from Australia, the UK, the USA, Canada, and New Zealand, can travel visa-free to Italy and other Schengen countries for a maximum of 90 days within any 180-day period. You will still need a valid passport to enter Schengen countries.
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