Cardiff Council is to build a £4 million Materials Recycling Facility (MRF) that it believes will be the first of its kind in the country.
The council has signed a contract with Bollegraaf Recycling and building contractor Stradform to construct the single installation plant.
Owned and operated by the council, it should be operating by next spring.
Cardiff Council's chief officer for waste management Phil Sherratt said: "It has been estimated that the new MRF will be able to process up to 60,000 tonnes of recyclable waste per year and it will be the only publicly owned plant of its kind in the UK."
When the plant become operational, it expects that the speed of separation of recyclable waste at the MRF will be 10 times faster than the council's current facility. It will contain four sorting halls, compared to the one it has currently. But it will also use state-of-the-art equipment and workers on the conveyors to remove contaminated materials. This system it believes will increase productivity.