Sign of Treasure Island near northern Italy (6)
I believe the answer is:
gemini
'sign' is the definition.
(Gemini is an example)
'treasure island near northern italy' is the wordplay.
'treasure' becomes 'gem' ('gem' can be a synonym of 'treasure').
'island' becomes 'i'.
'near' means one lot of letters go next to another.
'northern' becomes 'n' (abbreviation e.g. N. Ireland).
'italy' becomes 'i'.
'gem'+'i'+'n'+'i'='GEMINI'
'of' is the link.
(Other definitions for gemini that I've seen before include "Twins constellation" , "set of twinklers" , "House" , "Twins star sign" , "space programme" .)