An N‐heterocyclic carbene palladium (NHC‐palladium)‐catalyzed cascade annulation of alkynoic acids with unactivated alkenes under an oxygen atmosphere in ionic liquids is described. This protocol enables facile access for the preparation of diverse alkyl substituted α‐methylene‐γ‐lactones in moderate to good yields with excellent Z/E selectivity. Moreover, the ionic liquid not only acts as the green solvent, but also as the eco‐friendly chlorine source, thus avoiding the use of excess metal halides such as cupric chloride. Some preliminary mechanistic studies were performed, which further revealed possible pathways for this cascade annulation.