Jesus, Mary and Joseph will be nestled in an artistic re-creation of the picturesque rocky setting of Matera's famed "sassi" -- a U.N. World Heritage site and backdrop for recent Hollywood films about the Holy Family and Jesus.
The 78-foot silver fir was plucked out of the forests of Isernia by helicopter Dec. 5 and trucked 120 miles north with an Italian police escort.
The tree arrived in the square in the pre-dawn hours Dec. 6, the feast of St. Nicholas, patron saint of children and source of the Santa Claus character.
Vatican workers will spend several days decorating the tree with lights and gold and silver balls before the official lighting of the tree Dec. 14.
The large Nativity scene in the square will remain shrouded in mystery until its official unveiling Christmas Eve.
The scene, which will be assembled by Vatican personnel, will be decorated with more than 100 terracotta figures and detailed scenery crafted by the Italian artist Francesco Artese; his enormous "presepi" have been on display in New York City and Washington, D.C.
The Nativity scene, which will cover 180 square yards, will depict Matera's famed "sassi" -- cliff-clinging churches, buildings, streets and grottos carved out of the mountainside.
The ancient rock-hewn city is on the U.N. World Heritage List and was the setting for Mel Gibson's film, "The Passion of the Christ," and Catherine Hardwicke's "The Nativity Story," because the city's historical center poses a striking similarity to what Jerusalem might have looked like 2,000 years ago.
The Vatican's Nativity scene will depict the hardworking and simple life of farmers and craftsmen, and the terracotta figures will be wearing handmade traditional dress, according to the Vatican newspaper, L'Osservatore Romano.
The scene will also be specially lit using movie set lighting to give it a "cinematographic" feel, it said.