WASHINGTON—Mayor Vincent Gray vetoed a City Council bill that would require large retailers in the city to pay higher wages, a measure that had drawn national attention.

The bill—seen as targeting Wal-Mart Stores Inc., which plans to open its first six stores in the city—was opposed by business groups, city officials and retailers, among others. After the bill was passed in July, Wal-Mart officials threatened to cancel plans for at least three of its stores if the mayor didn't veto it.

...