The municipal ID program was approved by the city in 2007 but had been delayed while city administrators reviewed the plan.
The city will begin issuing the cards on Thursday.
The program, introduced by former supervisor and current state Assemblyman Tom Ammiano, offers IDs to anyone who can provide proof of residence, allowing access to libraries and some city government programs.
The cards can also be used as identification to open checking accounts at local banks, or for resident discounts at museums and the zoo.
Supporters say the program will aid undocumented immigrants, as well as homeless residents, transgender individuals, seniors, students and children who often lack government-issued identification.
Businesses have been invited to participate in the program by voluntarily providing discounts and benefits to ID card holders, in exchange for a business listing on the city's Web site.
City officials have said the feature could streamline hiring by allowing the ID cards to be used by employers to verify the identity of new employees.
The cards will be available at the County Clerk's office at City Hall.
They cost $15 for adults and $5 for children 13 and under, seniors and low-income individuals.
More information is available on the County Clerk's Web site at www.sfgov.org/countyclerk.