Trump's announcement on Twitter reversed a previous White House assurance that the idea -- criticized as political retribution against cities led by opposition Democrats -- had been dropped.
"Due to the fact that Democrats are unwilling to change our very dangerous immigration laws, we are indeed, as reported, giving strong considerations to placing Illegal Immigrants in Sanctuary Cities," Trump said.
"The Radical Left always seems to have an Open Borders, Open Arms policy –- so this should make them very happy!" he tweeted.
The Washington Post earlier revealed the proposal, which would mark a new flashpoint in the ever growing political divide over immigration.
Trump has staked his presidency on his insistence that the United States is being overrun by migrants and asylum seekers.
But opponents, mostly in the Democratic Party, say his push for building more walls on the Mexican border and his almost daily denunciations of migrants as dangerous criminals incites racial hatred.
In comments to reporters later, Trump said that he wanted Congress, where the House of Representatives is controlled by Democrats, to tighten visas and streamline the deportation process.
The US denied entry to more than 103,000 people on its southern border last month. Source: AAP
Otherwise, he warned, he'll order migrants to be dumped on the sanctuary cities.
"If they don't agree we might as well do what they say they want.... We'll bring them to sanctuary city areas and let that particular area take care of it," he said. "We can give them an unlimited supply."
Democrat cites human 'pawns'
Sanctuary cities are places where local authorities -- usually Democratic-run -- have refused to hand over undocumented immigrants for deportation.
Citing homeland security officials and leaked emails, the Post said White House officials first broached the plan in November, asking several agencies whether members of a caravan of migrants could be arrested at the border and then bussed "to small- and mid-sized sanctuary cities".
The White House told the Immigration and Customs Enforcement agency (ICE) that the plan was intended to alleviate a shortage of detention space, but would also send a message to Democrats, the Post said.
The suggested policy was pushed back within ICE, with a top official saying it was rife with concerns and noting "there are PR risks as well".
After the White House pressed the issue again earlier this year, ICE rebuffed it as "inappropriate."
The Post said a White House official and a spokesman for the Department of Homeland Security said the proposal was no longer under consideration.
"This was just a suggestion that was floated and rejected, which ended any further discussion," a White House statement said.
One of the centers targeted was the constituency of House Speaker Nancy Pelosi, whose office on Thursday blasted the plan.
"The extent of this administration's cynicism and cruelty cannot be overstated," said Pelosi spokeswoman Ashley Etienne.
"Using human beings -- including little children -- as pawns in their warped game to perpetuate fear and demonize immigrants is despicable."
Trump's all-out fight with the Democrats over immigration comes as border agents report being overwhelmed by the number of migrants and people demanding asylum after fleeing violent Central American countries.
The number of immigrant detainees in ICE custody has approached 50,000 in recent months, the Post said, an all-time high that has strained the agency's budget.
