Members of Sheffield Council's Cabinet will discuss plans to enter a new, five-year contract with the National Asylum Support Service that would mean the authority taking responsibility for providing homes for asylum seekers who are dispersed to this region by the Government.
No council taxpayers' money is used, with the Government funding all the expenses involved.
Numbers of people seeking asylum in this country have fallen dramatically recently from more than 71,000 in 1999 to less than 34,000 in 2004.
Coun Mick Rooney, Cabinet Member for Adults Services, said: "We have found that working in a very organised way with other local authorities in the region and to a formal contract has helped the city to be successful in supporting asylum seekers.
"A proper dispersal programme means we're better able to plan for the arrival of families and single people into the city and to find suitable housing for them.
"If we didn't have this system, we would still have asylum seekers coming to the city but no proper system for managing their arrivals."