The initiative will concentrate on two police districts: One on Chicago's West Side, the other on the South Side.
CeaseFire has received state money in the past but never direct city support.
Earlier this month, Chicago Police Superintendent Garry McCarthy suggested the group may undermine his officers' credibility in the community. The mayor is of a different mind and the CeaseFire partnership with police is his latest attempt to stop the killing.
The surge in the city-wide murder rate is so significant -- up 38 percent this year -- The New York Times put the story on its front page.
On Tuesday, Chicago Police came to Jackson Park armed with violence interrupters, who are frequently former gang members with rap sheets. Their mission is to diffuse tensions before they turn violent.
CeaseFire has had significant success, but police have kept the group and its former felons at arm's length -- until now.
"In this time, in this climate, with the amount of bodies from homicides, shootings, that continue to add up that may make this city seem as though it's not safe," said Chicago Police 1st Deputy Superintendent Al Wysinger. "If there were differences in the past, they have to go out the window."
For the first time the city will give CeaseFire $1 million to send 40 violence interrupters into two high-crime districts. One of those districts is near Jackson Park, where murders are up this year 82 percent
"The police department is not looking for CeaseFire to become informants to snitches, we're going to implement the model the way we've always done it," said Ceasefire director Tio Hardiman.
Critics, however, say the money would be better spent hiring more police officers than CeaseFire players who are frequently former gang members and convicted felons.
"We need more help," said, Pat Camden, Fraternal Order of Police spokesperson. "We don't need to be hiring gang members to be the police. We need to hire more police."
The police-CeaseFire partnership goes into effect July 13 in the 3rd and 10th police districts. City Hall will keep a close eye on the crime numbers in those neighborhoods over the summer to see whether it works.