A method and apparatus are disclosed from the perspective of a transmitting device. In one embodiment, the method includes being configured or allocated with an identity, wherein the identity comprises a first part of the identity and a second part of the identity. The method also includes the transmitting device generating a data packet for sidelink transmission, wherein the data packet includes the second part of the identity. Furthermore, the method includes transmitting device generating a control information associated with the data packet, wherein the control information includes the first part of the identity. The method further includes the transmitting device transmits the control information and the data packet.