The city council debated the proposed $1 million plan at its Wednesday meeting. Mayor Rahm Emanuel supports the plan and his office said the cost has already been earmarked.
Currently, tens of thousands of Chicagoans do not have an official photo ID, which means they cannot sign up for a bank account, or use city services such as libraries.
Chicago City Clerk Anna Valencia said the cards would also help senior citizens, youth and former prisoners. If approved, the city expects to issue its first municipal ID before the end of 2017.
However, keeping individual data secure is a concern.
"I'm for the municipal ID ... but we gotta make sure the data is secure," said Ald. Ricardo Munoz (22nd Ward).
New York City officials ran into that problem with their municipal ID card.
"They collected a lot of personal information about people, including people who were undocumented. When Donald Trump was elected, the officials in NYC thought 'Oh my goodness, we are holding all this information, we shouldn't have it, let's get rid of it.' Now they are under a court order not to do it," said Ed Yohnka, spokesman for the American Civil Liberties Union of Illinois.
Valencia said security would be Chicago's No. 1. priority and that the city would retain minimal data about those who sign up.