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DENVER—Denver Mayor John Hickenlooper says 322 city workers have opted to accept incentives to retire, which should save the city an estimated $11 million annually amid falling tax revenue.

The city says that to maintain vital services, it will fill about half the positions being vacated.

The city announced Aug. 31, as it faced a budget crisis in 2010, that it was offering a voluntary retirement incentive program for older employees.

In September, Hickenlooper’s administration proposed laying off 176 city workers to close a $120 million budget shortfall, but city officials said Tuesday that the retirements should help reduce that to fewer than 80 layoffs.