The council voted 43-3 in favor of the ordinance. The Chicago mayor and police superintendent both support the ordinance.
The alderman who introduced the proposal estimates the city would received $7 million a year in revenue, plus savings on incarceration.
In a statement, Police Superintendent Garry McCarthy said that the arrests of more than 18,000 people for misdemeanor possession of 10 grams or less of marijuana "tied up more than 45,000 police hours" and that the "new ordinance nearly cuts that time in half ... freeing up cops to address more serious crime."
States across the country are starting to relax their laws on marijuana possession. This month alone, governors in Rhode Island and New York moved toward decriminalization of small amounts of the drug. Of the 8,625 misdemeanor marijuana cases between 2006 and 2010 in Cook County, about 87 percent were dismissed, according to statistics from the Cook County Clerk of the Circuit Court.
The Associated Press contributed to this report.