The Midlands authority borrowed the money from the Government under a Public Service Agreement to beat its 16% target for 2003/4 by four percentage points.
Along with many other schemes, Warwickshire gave away £50 prizes to 20 recycling households in March in a last-ditch attempt to hit 20%.
And the ambitious bid paid off as the council recycled almost 3,000 tonnes more than was needed, securing the £750,000 bonus from Government.
The county also achieved an astonishing 1.5% reduction in the amount of waste produced, in contrast to the national average of 3.5% growth.
Warwickshire councillor Ken Browne said: We would like to say a big thank you to all the residents of Warwickshire for supporting the recycling schemes introduced over the past year.
This is a tremendous achievement, and we hope that people will continue to help us reduce, re-use and recycle. The money gained from achieving our target will be used in a variety of ways to support the councils services.
Warwickshire introduced a free home-chipping service, a discounted home composter scheme and a cotton nappy campaign, as well as kerbside collections.