CHICAGO (Reuters) - Chicago would sell up to $3.5 billion of revenue bonds this year for its O'Hare International Airport under proposals approved on Monday by the city council's finance committee.

With no discussion and on a voice vote, the committee sent the bond measures to the full city council, which meets on Wednesday. The committee on Friday postponed voting after some aldermen raised concerns about low minority-owned firm participation in airport bond deals and construction contracts, according to local media reports.

Mayor Rahm Emanuel proposed refunding up to $1.5 billion of general airport revenue bonds (GARBs) through Bank of America Merrill Lynch to save an estimated $187.2 million, according to a city briefing document.

The city would also sell as much as $1.5 billion of GARBs through Morgan Stanley to fund a runway and air field improvements.

The proposal calls for the sale of up to $350 million of passenger facility charge (PFC) bonds through Loop Capital Markets to expand and improve O'Hare's international terminal. Another approximately $80 million of outstanding PFC bonds would be refunded for savings.

Chicago and airline officials in July unveiled a big terminal plan for O'Hare, the world's second-busiest airport as measured in landings and take-offs.

Credit ratings for O'Hare bonds at A and A2 with stable outlooks are higher than the low-investment grade to junk ratings for Chicago's general obligation debt.

(Reporting by Karen Pierog; Editing by Matthew Lewis)