Local government minister Edwina Hart said local elections should not be held in 2003, which would mean a clash with those for the Assembly.
A spokesman for the Welsh Local Government Association said: 'This will help councils long-term objectives, including community planning and modernisation.'
A spokeswoman for Plaid Cymru said the plans would result in lower turnout and reduced legitimacy for local government.
Association leader Sir Harry Jones (Lab) said: 'Holding the elections in May 2004 will ensure the logistical complexity of organising two large elections simultaneously does not happen again.'
Ms Hart wrote to councils in Wales in November last year and a spokesman for the Assembly said councils were overwhelmingly in favour of postponing the