It's not clear what the new buildings would look like but developers will be required to meet so-called green building certification standards.
"We're shooting for the stars here. We want this revitalization process to be one of the best. It has to be the standard-bearer," said Ald. Manny Flores, 1st Ward.
Lathrop Homes opened in 1938.
Planners say the redevelopment calls for at least one third of the units to be reserved for public housing families.