Northern Ireland Environment minister Angela Smith said: "All 26 Councils will benefit from the grant from my department to assist with the implementation of their waste management plans."
Local authorities were entitled to use the funds individually or collectively within Northern Ireland's three Council Partnership Groups.
Belfast City Council took the biggest share of the spoils, collecting over £1.5 million.
Its current recycling rate is just 10% of household waste, but it has to reach the tough target of 25% recycling by the end of 2006.
The money received will be spent on the conversion of civic amenity sites to recycling centres and the procurement of compactors and refuse collection vehicles.
This was the fifth year that local authorities in Northern Ireland had received funds to help them meet their recycling targets.
In 2001/2 the grant was £2.2 million, which rose to £3.85 million in the following financial year before climbing to the current eight-figure sum.