Balotelli, who now plays his football in Turkey, played his last game for the Azzurri in 2018 but returned to the setup during the international break in January for a get-together during which no matches were played.
Widespread reports suggested Mancini, who worked with Balotelli at Inter Milan and Manchester City, would bring the 31-year-old back in for next Thursday's semi-final against North Macedonia, but Brazilian-born Joao Pedro got the nod instead.
Lazio defender Luiz Felipe has also received his first call up, while veteran centre-back pair Leonardo Bonucci and Giorgio Chiellini are included despite both missing recent Juventus matches through injury.
Italy will host North Macedonia on March 24 at Palermo's Stadio Barbera in front of a 100% capacity crowd after COVID-19 measures were lifted this week, with the winners facing either Portugal or Turkey in the playoff final for a spot at Qatar 2022.
Full squad:
Goalkeepers: Alessio Cragno (Cagliari), Gianluigi Donnarumma (Paris St Germain), Pierluigi Gollini (Tottenham), Salvatore Sirigu (Genoa).
Defenders: Francesco Acerbi (Lazio), Alessandro Bastoni (Inter), Cristiano Biraghi (Fiorentina), Leonardo Bonucci (Juventus), Giorgio Chiellini (Juventus), Giovanni Di Lorenzo (Napoli), Emerson Palmieri (Lyon), Alessandro Florenzi (Milan), Luiz Felipe (Lazio), Gianluca Mancini (Roma).
Midfielders: Nicolo Barella (Inter), Bryan Cristante (Roma), Jorginho (Chelsea), Manuel Locatelli (Juventus), Lorenzo Pellegrini (Roma), Matteo Pessina (Atalanta), Stefano Sensi (Sampdoria), Sandro Tonali (Milan), Marco Verratti (Paris St Germain).
Forwards: Andrea Belotti (Torino), Domenico Berardi (Sassuolo), Ciro Immobile (Lazio), Lorenzo Insigne (Napoli), Joao Pedro (Cagliari), Matteo Politano (Napoli), Giacomo Raspadori (Sassuolo), Gianluca Scamacca (Sassuolo) Mattia Zaccagni (Lazio), Nicolo Zaniolo (Roma). (Reporting by Peter Hall Editing by Toby Davis)
