Auckland mayor Len Brown wants to begin phasing in the living wage next year for the lowest-paid council staff.
The move would lift the minimum wage for more than 1500 staff to $18.40 an hour and is expected to cost $3.75 million a year.
The living wage would be applied over three years and Mr Brown says it would depend on additional savings so there would be no effect on services.
It will not initially apply to staff working through contractors. However, the council would look at whether the same wage would have to be paid by contractors whose staff do council work.
Auckland Council has about 10,000 workers and is one of the biggest employers in the region.
The mayor is including the move in his draft of next year's budget, which was put to councillors on Thursday morning and debated over the next six months.
Some Auckland councillors question the eventual cost of the Living Wage, while others insist it must extend to contractors.
Final decisions will be made in mid-2014, following community consultation.
The convenor of Living Wage Aotearoa, Annie Newman, commended the council's initiative, but says it needs to include those who do council work via contracting firms.
"We understand entirely that implementation takes time. But what's important is that it is done simultaneously, and the reason for that is that you will incentivise contracting out more workers and, in effect, creating a bigger problem if you don't bring contracted workers into the loop."
But the Employers and Manufacturers Association says such a move would be almost irresponsible and could force up costs in other firms.