The "living wage" rate for London will be increased by 25p to £8.55 per hour, Mayor Boris Johnson has said.
The so-called London Living Wage, which was introduced in 2005 and is calculated on the basis of the cost of living, currently stands at £8.30.
The wage is not binding on any firm but up to 200 employers back the scheme, benefiting 11,500 workers since 2005.
Five of 32 London boroughs have signed up, but City Hall and another five councils are awaiting accreditation.
Mr Johnson said the new living wage, which is calculated by the Greater London Authority, would give people "a decent standard of living".
Len Duvall, the Labour leader at City Hall, criticised the mayor for paying only "lip service" and highlighted that cleaners working for Transport for London (TfL) and security staff in the Metropolitan Police are paid the national minimum wage rate of £6.19 an hour.
The new London rate was announced at the start of Living Wage Week, with events around the country. The living wage rate outside London was also raised from £7.20 to £7.45.
About 80 firms are formally accredited by the Living Wage Foundation and another 47 are awaiting accreditation. Another 73 employers have said they are committed to the scheme.
The London boroughs of Hounslow, Lambeth, Camden, Islington and Lewisham are formally accredited while Ealing, Enfield, Haringey, Southwark and Tower Hamlets are in the process of signing up, the mayor's office said.
The Greater London Authority, London Fire Brigade and TfL are also awaiting formal accreditation.
None of the Conservative-run councils have formally signed up to the scheme.
Mr Johnson, said: "By building motivated, dedicated work forces the living wage helps businesses to boost the bottom line and ensures that hard working people who contribute to London's success can enjoy a decent standard of living."
Mr Duvall said: "The mayor claims to have championed the Living Wage in London, but there's been no increase in the proportion of jobs paying LLW since 2005. The mayor's Living Wage Campaign has so far tackled just 1.3% of the problem.
"The mayor needs to do more then pay lip-service to the London Living Wage for Londoners the 680,000 adults in London living in in-work poverty."
Employers who sign up to pay the increased wage rate will now be able to display a trademark designed by the Living Wage Foundation.
Rhys Moore, director of the charity, said: "The living wage movement is growing as more employers realise the benefits of paying workers enough to get by on."
Neil Jameson, executive director campaign group London Citizens, said the cost of the increased wage rate should be borne by the employers not "carried by the children, parents and families of low waged workers".