The lowest paid workers at Auckland Council will get a pay rise to about $21 an hour by October 2019.
Councillors voted to introduce the living-wage policy this afternoon after Phil Goff pledged to push for it during his mayoral campaign last year.
The policy will be phased in with all staff to be paid at least $18 an hour from September, increasing each year till 2019.
Cathy Casey Photo: RNZ / Cole Eastham-Farrelly
About 2000 people will get the pay rise, which is estimated to cost $1.9 million in the first year.
The policy will also apply at organisations run by the council such as Auckland Transport and Watercare, but excluding contractors, volunteers and trainees.
Councillor Cathy Casey told the meeting it would make a huge difference to people's lives.
She said people on the lowest wages tended to be brown-skinned and were usually women.
Campaigners say the living wage, an alternative to the minimum wage, would allow workers to participate as active citizens in society.
It is to be set at $20.20 from July.