The layoffs were part of the mayor's plan to close a $1.2 billion deficit in next year's budget.
According to the Sun-Times, revenues generated by the sale of recreational and medical marijuana have gone through the roof allowing the mayor to cancel the layoffs.
Revenues topped $100 million statewide for the first time, in the last month.
A joint statement issued on Saturday by Lightfoot and the City Labor President reads in part:
"This will ensure Chicago's public workers, the backbone of our neighborhoods, maintain their jobs and health insurance while also protecting the critical services Chicagoans rely on during these unprecedented times."