* Italian labour reform eases hiring, firing restrictions
* Fiat Chrysler seeing strong sales of two new models
* Firm aims to hire more than 1,000 new workers
MILAN, Feb 26 (Reuters) - Fiat Chrysler has agreed to give permanent contracts to hundreds of new hires at its Melfi plant in southern Italy currently on short-term agreements, a union said on Thursday, in an early boost for Prime Minister Matteo Renzi's labour reforms.
In a statement issued after nine hours of negotiations, the FIM-CISL union said the change would take place in six months.
The switch would be a first clear sign that Renzi's recently passed Jobs Act, aimed at easing hiring and firing restrictions, can persuade big employers to take on more permanent staff.
Fiat Chrysler Automobiles (FCA) said in January it planned to add more than 1,000 new workers at Melfi thanks to strong sales of its new Jeep Renegade and Fiat 500X models. Seven hundred new workers have already been hired since.
It said at the time that these new workers would be hired on temporary contracts and offered more secure ones once demand for its cars had stabilised but did not give a specific timeframe.
FCA said its decision was also conditional on the new labour rules that finally came into force last week. The new rules ease firing restrictions for large private sector firms but also aim to reduce the use of short-term contracts.
"This is a historic agreement because it's the first time that we manage to officially agree with the Fiat group that after only six months more than 1,000 temporary workers would be offered permanent contracts," the union said.
Fiat declined to comment.
Renzi, who pushed the labour reforms through in the face of stiff opposition from trade unions and many in his own centre-left Democratic Party, is hoping the new rules will encourage firms to hire, especially young people, among whom unemployment is running at more than 40 percent.
Thursday's deal also includes an agreement to raise the number of shifts to four to meet rising demand for vehicles as a gradual recovery in Europe finally gains momentum after a six-year slump that pushed sales to multi-decade lows.
Union sources added that, given positive demand for all Melfi models, which also include the older Fiat Punto, new hires at the plant would likely exceed the forecasts given in January.
Unions said they were told that production of the Punto at Melfi would continue throughout 2015, dismissing reports that the manufacture of this model could either be stopped or moved elsewhere. (Reporting by Agnieszka Flak, Francesca Piscioneri and Stefano Rebaudo; Editing by Gareth Jones)