This paper presents a co-design framework to guide the development of IoT-based solutions for smart cities. Grounded in four analytical dimensions - technological, human, integrative, and contextual - the framework unfolds through four iterative stages. It supports meaningful stakeholder participation while addressing the complexity of urban contexts and technical infrastructures. The approach combines established methods such as Think Aloud, journey mapping, and card-based ideation tools with the use of Large Language Model (LLM)-based AI agents.