Liverpool City Council has pledged to "lead by example" in its bid to become the UK's first smoke-free city.
Liverpool wants to be smoke-free by 2008
It wants to follow New York and Dublin, which have both banned smoking in public places.
Mike Storey, council leader, said on Monday that tobacco companies would not be used for sponsorship for its status as European Capital of Culture in 2008.
The city council says that Liverpool has the UK's highest rate of lung cancer deaths.
The council is a partner in the SmokeFree Liverpool campaign with the health service, businesses and the Roy Castle Lung Cancer Foundation.
Mr Storey, speaking at a SmokeFree conference, said: "We must not collude with tobacco companies to promote the sale of cigarettes. This means the Liverpool Culture Company will not accept sponsorship from them.
"It will take an ethical stance when deciding who to partner with because the European Capital of Culture title is a celebration of the life of the city.
"There are not many things more damaging to life than smoking."
A proposal to promote a local act of Parliament which will ban smoking in restaurants, pubs, shops, offices and enclosed workplaces will be considered by councillors this month.
If approved, the city council will petition Parliament to pass a smoke-free law for Liverpool.
It aims to get the ban in place by 2008 for its year as European Capital of Culture.