Illinois Governor Pat Quinn on Sunday signed a law allowing undocumented immigrants to apply for driver's licenses, in a move he said would improve road safety.
Undocumented immigrants can also obtain driver's licenses in New Mexico and Washington state, while Utah allows driving permits.
"Despite the stalemate on immigration reform in Washington D.C., Illinois is moving forward," Quinn said in a statement. "This common sense law will help everybody, regardless of their background, learn the rules of the road, pass a driving test and get insurance."
In Washington, Democratic and Republican senators are preparing a bipartisan plan to overhaul U.S. immigration laws. On Sunday, Republican Senator John McCain of Arizona said on ABC's "This Week" program that such a plan could be introduced as early as this week.
Illinois' law will require undocumented immigrant drivers to take a driving test and carry car insurance in a state where an estimated 250,000 illegal immigrants are believed to be driving, supporters of the law said.
Unlicensed, uninsured drivers are believed to be involved in about 80,000 accidents in Illinois each year, resulting in $660 million in damage, according to the Illinois Highway Safety Coalition.
The driver's license legislation met strong opposition from state Republicans when it was first introduced in Illinois. But their position softened since President Barack Obama won re-election with large support from Hispanic voters and Illinois Democrats made big gains in the state legislature.