The production is expected to last about four weeks. Daley says it will pump $20 million into the city's economy and create more than 200 jobs.
"Movies and TV shows made in Chicago and about Chicago showcase our city to the world and create excitement about it and create jobs for our residents," said Daley.
Transformers 3 is scheduled to open in theaters next summer.
In recent years, other movie blockbusters, including 'The Dark Knight' and 'Public Enemies,' have been filmed in Chicago.