The contract, due to be signed in December 2006, aims to boost Northumberlands household waste recycling rate to over 45%. Northumberland is already a leading recycler in the region, achieving a recycling rate of almost 30% in 2005/06.
But the new contract aims to boost recycling rates further and generate electricity from waste that cannot be recycled.
Northumberland County Council head of waste management Paul Jones said: This is an affordable and sustainable strategy to handle Northumberlands waste needs and will make Northumberland one of the greenest counties in the UK.
Councillor Alan Cutter, executive member for environment and regeneration added: We have also been able to get significant funding support from the Government for this scheme and secure a competitive deal with SITA. It is a good deal for both taxpayers and future generations.
The council said it was now continuing the process of securing land and submitting planning permission for sites. It needs to seek final approval from Government before entering the new agreement, which aims to be operational from April 2007 with all new sites developed by June 2009.