The library competition tasks designers and architects to come up with ideas for the "first and largest children library inspired by the fairy tale of Pinocchio".
They are expected to tell the story of the fairytale through their design, while also creating a space where children and adults alike can go to read.
The competition organised by Young Architects Competitions (YAC) in collaboration with Foundation Carlo Collodi, coincides with the year of the Collodi Capitale Europea dell'Infanzia (Collodi European Childhood Capital).
The year-long programme also includes the building of a fairy tale theme park inspired by Pinocchio, where the library would be located.
The site will be built in Florence, where Carlo Collodi – the author of Pinocchio – was born, and lived until his death in 1890.
"This library will have to be the image and the materialisation of childhood dreams for millions of visitors who will visit the park," said YAC, whose competition has been supported by the Council of Architects of Pistoia, School of Fine Arts in Florence, Touring Club, ISI Florence and Casabella magazine.
"[The competition] invites designers to go back to the magic horizon of fairy tales and stories. By letting the project take them back to their childhood, designers can rediscover the sense of wonder and fantasy necessary to design a refined place."
Cash prizes will be awarded to winners selected by an internationally-renowned jury, including designer Fabio Novembre and architects Fedele Canosa of Mecanoo, and Mario Cucinella.
The first prize winner will receive €10,000 (approximately £8,826), the runner-up will receive €4,000 (£3,530), and the third prize winner will receive €2,000 (£1,765).
Four Gold Mentions will each be awarded €1,000 (£882), and 10 designers will also receive an "honourable mention", while an additional 30 finalists will be recognised by the jury for the quality of their design.
More information and competition guidelines can be found on YAC's website.