Swansea Council has voted to look at the cost of giving staff a day off work to celebrate St David's Day.
The UK government has rejected a St David's Day bank holiday
Plaid Cymru councillors put forward a motion to investigate the cost and legality of the council celebrating Wales' national day.
Plaid's Darren Price said he was "chuffed to bits" that the council was looking at the issue seriously.
The UK government has rejected calls for a Wales-wide holiday, although it has been backed by Assembly Members.
Mr Price said Swansea should "take the lead" as it had been seven years since AMS voted to make March 1 a bank holiday without it happening.
The council voted to commission a report on Thursday.
The motion also called on the council to hold and promote events for all ages on St David's Day and lobby other employees in the city to join in.
Anglesey Council already marks St David's Day with a staff holiday but it comes from existing holiday and flexi-time entitlement.
Mr Price said: "Someone needs to take the lead on this as it has been seven years since the assembly unanimously voted to make St David's Day a bank holiday - hopefully it can be Swansea."
The CBI in Wales said the general feeling among its members was that they were against making St David's Day a bank holiday.
Staff could take time off to enjoy the splendour of Swansea Bay
Its director David Rosser said: "There would be marginally more support if it replaced an existing bank holiday.
"But even then Wales being closed for businesses when our trading partners, suppliers etc elsewhere across the UK are in work would be an inconvenience."
After the vote in 2000 the assembly government asked the UK government to designate St David's Day a bank holiday but this was formally rejected in 2002.
An assembly government spokesman said although the Government of Wales Act 2006 devolved further legislative powers to the Assembly, it did not have the powers to introduce or change the dates of bank holidays.
"If the assembly voted to approve a draft order which would give it legislative competence to do this, it could not acquire that competence unless the secretary of state, the UK government and both houses of Parliament agreed," added the spokeswoman.