Based on the panel data of 281 cities in China from 2006 to 2020, and the theoretical mechanism of institutional opening of the service industry to promote city-level green innovation, this paper empirically tested the impact of the service outsourcing model cities on regional green innovation by using the multi-period Differences-in-Differences method. The findings demonstrate that: (1) the service outsourcing model cities has significantly improved the quantity and quality of green innovation in model cities. Through a series of robustness tests, the above effect is still significant.(2) the mechanism test results prove that the policy improved urban green innovation through optimizing the industrial structure, expanding openness, and improving the quality of human capital.(3) the impact of the policy on green innovation presented significant heterogeneity in the geographic location and informationalized level, and the policy promoted greater green innovations in cities in coastal provinces and with high information level.