CTU said school would still be in session that day.
The union said CPS would be providing buses for students and educators to attend a rally at 1 p.m. in Union Park and that there would be no retaliation for students or staff who participate.
CPS said that schools wishing to participate must follow the existing CPS student travel policy and normal field trip procedures.
"This agreement preserves the classroom time students deserve and respects our staff and families who must be able to trust CPS to uphold the academic school year calendar," CPS CEO Macquline King said. "At the same time, the agreement honors the proud history of civic action in Chicago and beyond."
CPS said participation in any civic events is voluntary, and parental permission is required.
The decision comes after several days of back and forth over the issue.
The teachers union pushed hard to get the district to cancel classes so students and staff could take part in May Day protests and rallies.
But CPS did not give in.
CPS parents, who were concerned about what they would do with their children if classes had been canceled on May 1, can breathe a sigh of relief.
Joseph Williams has four kids in CPS. He's grateful the two sides reached a compromise.
"Parent voices matter; our voices should always be at the table and looking at the solution that they came out of this. I felt I was heard as a parent because this was one thing that I was concerned about, as a parent. So I feel now it's being addressed," William said.
Chicago has a rich history of advocacy for workers' rights. The Chicago Teachers Union convinced CPS to allow up to 100 schools to take part in field trips for May Day civic activities, including a workers' rally scheduled on the afternoon of May 1.
"I do believe that this is a good balance. It's a good balance for the students. It's a good balance for the teachers. It's a good balance for everyone because now we know. We know what direction we're headed, and our people are able to plan for it," said Sylvelia Pittman, CTU executive committee member.
This represented the first test of will for King, since she was elevated to permanent CPS CEO.
Teachers will be able to provide district-approved lesson plans to address the history of International Workers Day.
"We believe in teaching the truth; it is worth for us to be able to teach our students the importance of what May Day is," Pittman said.
Principals will be able to decide if their schools will participate in the optional May Day activities.
As part of the teachers' contract, they can opt to take a professional development day, where there would be no school, on May 1. But the soonest they could do that would be 2028.
Mayor Brandon Johnson said in a statement, "We are pleased all parties are working together to ensure school communities can participate in commemorating International Workers Day. Schools will remain open for instruction, while multiple opportunities will be provided for those who wish to participate in this day of civic action both inside and outside of the classroom.
"Encouraging participating allows Chicagoans to honor our history while advocating for our future. We look forward to a day of meaningful solidarity and community resistance to the forces trying to tear us apart.
"The history of May Day in America is rooted in Chicago. It was in our city that workers organized around the simple demand of an eight-hour workday and raised the consciousness of a gilded nation through the Haymarket Strike.
"We continue to work with all City Agencies and Departments to ensure a safe and impactful May Day."