The 25-year agreement involving Lancashire County Council, Blackpool Council, Global Renewables and contractor Bovis Lend Lease will see an array of world-leading technologies used to treat waste.
Global Renewables development director David Singh said: Resource recovery is at the heart of Global Renewables and Lancashires approach to waste management. It is an approach that will enable more than 300,000 tonnes of resources to be recovered and recycled every year with diversion from landfill at over 75% and over 1,000 hectares of community woodland to be established over the life of the contract.
In addition, the project will mitigate over four million tonnes of greenhouse gas emissions, compared to current waste management practices in the county.
With backing from two major international banks, £320 million will be invested in the design, construction and operation of two facilities at Leyland and Thornton which will handle around 600,000 tonnes per annum of household waste.
These will drastically reduce volumes going to landfill, avoid the need for incineration and employ a mechanical biological treatment process capable of recovering recyclable materials such as paper, metal, glass and plastic.
The organic portions of the waste will then be transformed into renewable energy and a high quality compost product, suitable for woodland or energy crop planting, together with land reclamation and remediation.
Bovis Lend Lease global chief executive Bob Johnston said: This will be a first for Britain and a real step forward in the way that local authorities tackle the problem of waste handling and recycling.
Its an exciting and far-sighted project to be involved in and it fits very well with our own sustainability goals.
The two main parks constructed as part of the contract will form the centrepieces of a wider network that will cover the entire county.
Lancashire County Council leader Hazel Harding said: This is one of the largest and most significant waste private finance initiative projects in the whole of the country.
This method of dealing with our waste compares very favourably with any other option. Landfill costs are increasing as availability becomes scarce and if we dont act now, we run the risk that disposal costs could rise dramatically.