MILAN, March 6 (Reuters) - Telecom Italia (TIM) expects its core earnings to grow at 8% on a compound annual basis over the next three years under a new leaner structure after a planned sale of its domestic fixed-line network, it said on Wednesday.

Worth up to 22 billion euros ($24 billion) and backed by the Italian government, the network deal is designed to slash the company's debt pile and cut costs.

"The sale of the fixed network will allow TIM to move into the market with fewer financial and regulatory constraints," TIM said in a statement after a board meeting approved a new three- year business plan set out by Chief Executive Pietro Labriola.

The former phone monopoly targets a compound annual growth rate (CAGR) of 3% for revenue in the period to 2026 for the streamlined company under a programme it has named "Free To Run".

It reported revenue of 14.4 billion euros on a proforma basis for the new structure last year, while earnings before interest, tax, depreciation and amortisation (EBITDA) including lease costs stood at 3.5 billion euros on the same basis.

For its domestic business, under pressure for years due to stiff price competition, TIM forecast a growth of core earnings at an annual rate of 9-10% over the period on a compound basis, from 1.9 billion euros last year.

Under the model sought by Labriola, the domestic consumer business would stabilise its revenue base by building up partnerships to sell its customers a wide range of services beyond connectivity, while the enterprise arm would continue its growth helped by an expanding cloud market.

The company said it expect to generate positive free cash flow both in Italy and from its Brazil-listed unit in the period to 2026.

TIM, which expects to finalise the network sale to U.S. fund KKR in the middle of the year, forecast its debt after lease to fall to 1.6-1.7 times its core earnings in 2026, from 3.8 times last year under the current structure.

The outgoing board, whose mandate expires in April, has also drawn up a list of candidates for investors to vote on at shareholder meeting.

The slate includes Labriola's name to retain the role of CEO and business lawyer Alberta Figari as chair, replacing Salvatore Rossi. ($1 = 0.9178 euros) (Reporting by Elvira Pollina Editing by Keith Weir)