Government funding of £138 million has been awarded to a local authority partnership with plans to hit recycling rates of 55% by 2020, 5% above the UK target.
The funding will be used by Milton Keynes Council and Northamptonshire County Council to develop the treatment of household waste that cannot be recycled.
A tender for the contract is soon to be advertised in the Official Journal of the European Union. Land for future facilities has been identified by the councils, however, no technology has been specified.
The partnership said that the award was the largest amount of Private Finance Initiative (PFI) credits to be given to a project of this kind so far.
Northamptonshire County Council deputy leader Ben Smith (pictured) said: Milton Keynes and Northamptonshire are likely to see significant housing growth over the next 20 years and the amount of waste being generated as a result is going to increase. Although there are schemes in place to ensure as much as possible is recycled and composted, there will always be a small amount left. We cannot continue to rely on landfill to dispose of this.