"The National Assembly approves women's participation in the Municipal Council elections," state news agency Kuna reported on Tuesday.
Kuwaiti women are not allowed to vote or run in parliamentary polls, but the government has introduced a bill to grant full female suffrage that has yet to be approved by the 50-man house.
Similar government moves have failed in the past in the pro-Western country.
Kuna said 26 out of 49 MPs in attendance backed the bill, allowing women to take part in municipal polls. Twenty lawmakers were against and three abstained.
Last month, the MPs passed a municipal elections law without a government-proposed article to let women take part, setting back hopes that the house would approve broader female suffrage.
But the government amended the law and sent it back to parliament.
The United States has been pressing its allies in the Middle East to make political reforms, saying lack of freedom and democracy have fostered violent Muslim insurgencies.