Colao, a businessman, was Vodafone CEO from July 2008 to October 2018 and is highly regarded by many European leaders, notably Germany's Chancellor Angela Merkel as well those from Eastern Europe.
He could also win support from Italy's centre-left Democratic Party and the anti-establishment 5-Star Movement, who on Tuesday agreed a 29-point programme for their planned coalition government.
Severino, is however said to be the front-runner for Italy's nominee member of the European Commission, whose first-even female President Ursula von der Leyen wants gender parity in the new EU executive that takes office in November.
EU countries were due to submit their nominee Commissioners by August 26 but Italy requested an extension after the previous, fractious coalition government collapsed when 5-Star's partner, the far-right League party's leader said he could no longer work with it.
Italy is the only EU member state (other than the UK) not to have put forward its nominee Commissioner.
The nascent Italian administration is set to be led by outgoing Prime Minister Giuseppe Conte, a non-affiliated former law professor who is close to 5-Star. The new government is expected to go ahead if it is backed by a majority of 5-Star members in an online vote taking place on Tuesday.
( With inputs from IANS )