The mayor's office says the deal will bring millions of dollars in investments and new jobs to the city.
ComEd will invest $2.6 billion dollars over 10 years in the smart grid system.
It's designed to reduce power outages and give customers more control over their energy use.
"The smart grid bill and the work it authorizes it designed to improve reliability place more bill control in hands of customers, attract digital business of the future and create jobs today," said ComEd's Anne Pramaggiore.
ComEd will begin installing the smart meters in September.
The work will continue through 2021.
