The system will be similar to London's Boris Bikes, which is named after the Mayor, and will allow the public to use one of 150 cycles spread across 30 bike racks around the city, for as little as £1 per hour.
After the Games the plan is to add a further 250 bikes.
People will first have to register for the scheme, after which they will be able to book the bikes online, by phone or by using a new smartphone app.
All registered users will receive a special swipe card that can be used in conjunction with the bike's built-in computer system, aiming to make the booking process simple and quick,
Similar initiatives are already in place in New Zealand, Germany, Poland and Dubai and operate in more than 80 cities across the globe.
It is believed there will be a membership cost of £60 per year to join, as well as an additional hourly hire charge. Members will pay a lower hourly fee than non-members, and will be able to hire a bike free for up to 30 minutes.
They can then expect to pay £1 per hour for a maximum of five hours, with the rate being capped at £5 for 24 hours.
Bikes are expected to hit Glasgow's streets from May 1 next year, and the extra 250 are hoped to be in place by September.
The £500,000 for the scheme will come from the city council.
Council leader Gordon Matheson said: "Glasgow is set to join the likes of London and Paris with the introduction of this cycle hire scheme.
"This was a direct result of the upcoming Commonwealth Games and an increase in interest from cycling charities and the public.
"We have gone through a rigorous tendering process to ensure the scheme will fit perfectly with the cycling objectives contained in the local transport strategy.
"As a council we are committed to promoting healthy and environmentally sustainable methods of transport that minimise harmful emissions.
"And the hiring of the cycles will be easy and user friendly."
To reduce the chances of theft or vandalism, the bikes will be protected by a chain-lock and personal identity number code and fitted with a GPS tracking system.
Users will have to register a debit or credit card and a charge will be made if they are not returned or are damaged.