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The city is filing suit on Monday against the Department of Justice, which announced it would withhold millions of dollars in police grant money from so-called sanctuary cities.
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The move by Attorney General Jeff Sessions comes after a federal judge blocked a key part of the directive, the threat of withholding federal funds.
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The president's immigration policies have been dealt another setback. A federal judge's ruling will stop the administration from penalizing sanctuary cities while a lawsuit winds through the courts.
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The Justice Department's order to withhold $4.1 billion in federal grants over immigration enforcement could affect major cities including New York, Chicago, Los Angeles and Washington, D.C.