The decision follows recent discussions with Transport Scotland about ways of extending the National Entitlement Card scheme to the tram service.
Transport Convener Councillor Lesley Hinds said: "We are determined that Edinburgh residents who are eligible for free travel across the country should be able to use the tram on the same basis and we're now working with Transport Scotland to explore ways in which Edinburgh Council can support such a local scheme.
"The tram needs to be wholly integrated into the national transport network and, for me, this means that over 60s and people with disabilities should have free use of the service.
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"We'll now start looking at the practicalities of funding this whilst operating within the national card scheme and we'll work closely with Transport Scotland to achieve this."
Transport Minister Keith Brown said: "Securing the future of the national concessionary bus scheme was a key commitment for the Scottish Government and I am pleased that, following our discussions, Edinburgh City Council has agreed that it will look at ways of funding any local concessionary scheme for the trams.
"This is good news for local residents in Edinburgh and the aim is that this scheme will help promote integration between the tram and local bus services in the city.
"The Scottish Government is providing £500m in financial support for the construction of the Edinburgh trams project. Local authorities have also received a fair three-year settlement from national government for 2012-15 and as part of that settlement, the City of Edinburgh Council is receiving an extra £68m over the three years to disburse as they see fit.
"Importantly, concessionary passengers will continue to be able to travel for free on buses just as they do now."
(IT)
