The move would benefit around 15 lakh people. The decision was taken at a cabinet meeting chaired by Chief Minister Sheila Dikshit.
While 157 colonies are located on the land belonging to Archaeological Survey of India, 48 have mushroomed on forest land.
"The urban department has been instructed to come out with a detailed list of such colonies along with total number of colonies being regularised and their localities at the earliest say couple of weeks," the official said.
The Congress government in Delhi had issued provisional regularisation certificates to over 1,600 illegal colonies in 2008 ahead of the state assembly polls.
However, the move hung fire till 2012 , when Dikshit took up the matter with the central government and got a go-ahead for 917 unauthorised colonies in September last year.