The sensational prediction was allegedly made by Cardinal Paolo Romeo, the archbishop of Palermo in Sicily, on a recent visit to China.
Cardinal Romeo reportedly made the startling prediction of the Pope's death during a trip to China in November 2011.
He seemed so sure of the fact that the people he spoke with, including Italian businessmen and Chinese representatives of the Catholic Church, were convinced that he was talking about an assassination attempt.
They were so alarmed by his remarks that they reported them back to the Vatican.
The extraordinary comments were written up in a top-secret report, dated Dec 30, 2011, and delivered to the Pope by a senior cardinal, Dario Castrillon Hoyos, a Colombian, in January.
The Vatican has reportedly opened an investigation into the claims.
The report was written in German, apparently to limit the number of people within the Vatican who would understand it if it was inadvertently leaked.
It warns of a "Mordkomplott" – death plot – against Benedict.
The story was broken on Friday by an Italian daily, Il Fatto Quotidiano, with the headline "Plot against the Pope – he will die within 12 months".
The newspaper, which has a reputation for scoops, published a page from the confidential report.
"During his talks in China, Cardinal Romeo predicted the death of Benedict XVI within 12 months. His remarks were expressed with such certainty and resolution that the people he was speaking to thought, with a sense of alarm, that an attack on the Pope's life was being planned," the paper reported.
"Cardinal Romeo could never have imagined that the indiscreet remarks he made on the trip to China would be communicated back to the Vatican by third parties."
Asked about the reported comments on Friday, however, Romeo said that the words attributed to him were "absolutely without basis."
"It is so outside of reality that it should not be given any consideration," Romeo was quoted by Italian news agency ANSA as saying.
The Vatican's spokesman, Father Federico Lombardi, said the report was "so incredible that we cannot comment on it".
"It seems to me something that is so far from reality that I don't even want to address it," Father Lombardi said. "It seems an incredible story and I don't want to comment."
He did not deny the existence of the document to AFP, but added that it was "devoid of reality".
Cardinal Romeo also named Benedict's XVI likely successor as Cardinal Angelo Scola, the archbishop of Milan – meaning the papacy would return to an Italian after the German Benedict and his Polish predecessor, John Paul II.
He allegedly told his contacts in China that Pope Benedict could not stand Tarcisio Bertone, his Secretary of State and the Vatican's second most senior figure, amid reports of bitter power struggles going on within the Holy See.
Experts said the release of the document could be part of a power struggle within the Vatican administration to try and force Bertone to leave.
Cardinal Romeo said Benedict viewed Cardinal Scola as his ideal successor because they had similar personalities and theological outlooks.
Cardinal Scola was previously the Patriarch of Venice, but was promoted to the archbishopric of Milan by Benedict in June last year.
The most recent attempt on a pope's life was in 1981 when John Paul II was shot and critically wounded in St Peter's Square by Mehmet Ali Agca, a Turkish gunman with links to a shadowy militant group called the Grey Wolves.
It has been claimed that the assassination attempt was backed by the KGB and Bulgarian secret service, in retaliation for the pope's support for the pro-democracy Solidarity movement in his native Poland and his opposition to Communism.
Or is someone trying to speed up the St. Malachy's "Prophecy of the Popes"?
Supposedly Joseph Ratzinger (Benedict XVI) is Gloria oliuæ - "Glory of the olive", is allegedly the penultimate Pope.
The final Pope "Petrus Romanus" - "Peter of Rome/ Peter the Roman" will pontificate over the destruction of Rome.
Petrus Romanus, quipaſcet oues in multis tribulationibus:quibus tranſactis ciuitas ſepticollis diruetur, & Iudex tremẽdus iudicabit populum ſuum. Finis.
Peter the Roman, who will nourish the sheep in many tribulations; when they are finished, the city of seven hills will be destroyed, and the dreadful judge will judge his people. The end.