A council may offer thousands of pounds in an equal pay settlement to about 3,000 mostly female employees in catering, cleaning and social care.
Many low-paid workers could be offered an equal pay settlement
Cardiff Council wants to avoid the tribunals which have dogged a number of UK councils following the introduction of equal pay legislation.
The settlement could mean a pay-out of more than £9,500 per person.
The council has the go-ahead to borrow £11.5m to cover settlements, if its executive agrees to the proposals.
But the council admitted it had not reached a settlement that trade unions could recommend to members.
The council's executive has been advised to make settlement offers to all potential equal pay claim recipients "in the interests of maintaining good employee relations and preventing costly and time-consuming legal action".
Members will meet on Thursday to discuss the report relating to equal pay.
Similar settlements have already been reached in fellow Welsh councils Neath Port Talbot and Torfaen and across the UK.
The Welsh Assembly Government has given approval to the council to borrow £11.5m to fund the settlement, which covers discrepancies in back pay.
Alternatively, the council said it was looking at other sources of finance which would not affect the council tax payer.
A council spokeswoman said it had been negotiating with trade unions since September and that it believed its offer was fair.
"[It] would prevent potential costly legal battles which the authority would defend robustly," she said.
Staff believed to be affected will be invited to a series of briefing sessions to learn what their entitlement might be and learn how to claim it.
The level of settlement would depend on grade, length of service and contracted working hours.
The assembly government requires that all payment to eligible employees is made by 31 March.
Executive member for finance Mark Stephens said: "We want to ensure that we look after our employees affected in this way and have worked hard to bring as speedy a conclusion as we can to this process.
"We believe that this is a fair settlement which will prevent a lengthy legal battle and enable us to pay compensation."
Councils agreed to review wages and implement new pay structures in 1997.