ROME Aug 23 (Reuters) - Germany has agreed to take in hundreds of migrants who are blocked in Italy in a move that might revive the European Union's failed relocation programme, Italy's Interior Minister Angelino Alfano said on Tuesday.

As part of a deal to relieve pressure on Europe's frontline states in the migration crisis, the European Commission last year devised a plan aimed at moving thousands of new arrivals away from Italy and Greece towards other EU members.

Under the scheme, up to 40,000 migrants could be relocated from Italy over two years, but so far only a few hundred have been flown out with many EU allies apparently reluctant to welcome in asylum seekers and refugees.

"Up until now, the relocation has been a real flop," Alfano told la Repubblica TV.

"(But) today we have heard that from September hundreds of refugees will be able to go each month to Germany. If things go well with Germany, we think they will also go well with other countries," he added.

Italy has taken in more than 420,000 boat migrants since the start of 2014, official figures show.

Many of the newcomers move swiftly on, looking to reach wealthier northern European nations, but a crackdown on border crossings has slowed the flows, leading to overcrowding in Italy's transit camps and refugee centres.

"We must remember that Germany already took in more than one million migrants in 2015. If it also takes in some of our (refugees) ... the message will be extremely strong, because if Germany can do it, then so can all those who have not put in the huge effort that Germany already has," Alfano said.

Merkel has faced criticism in Germany for being too open to migrants, and the anti-immigrant Alternative for Germany (AfD) is expected to perform well in local elections in two German regions next month.

Only Syrians, Eritreans and Iraqis qualify for the relocation programme, meaning the bulk of migrants reaching Italy, many from West Africa, are not be eligible for relocation.

According to latest data, some 3,915 Eritreans, 787 Syrians and 686 Iraqis reached Italy in the first seven months of 2016.

(Reporting by Antonella Cinelli; Editing by Dominic Evans)