Residents of Fremont demanded the vote, set for Monday, on whether to ban businesses from hiring illegal immigrants and bar landlords from renting to them, The New York Times reported.
Elected city officials challenged the effort, but residents resisted and took the case to the Nebraska Supreme Court, which approved the election, the newspaper said.
The election has divided city residents.
The city's Hispanic population is less than 10 percent, but some residents say they blame illegal immigration for a perceived rise in crime and loss of jobs for local residents.
Others oppose the election but find the split with their neighbors difficult.
"In this very quiet little town where this hasn't been an issue, it's uncomfortable," said Michelle Knapp, who opposes the anti-illegal immigrant law.
But, she admits, at times she's only whispered her view. "You don't know what people are listening."