Greater Manchester Waste Disposal Authority (GMWDA) has signed a 25-year £3.8bn waste and recycling contract with Viridor Laing that will trigger a £640m construction programme, creating a network of recycling facilities over the next five years.
These will include a biological treatment plant with anaerobic digestion, a materials recovery facility and a combined heat and power plant.
Greater Manchester's network of 25 household waste recycling centres will also be upgraded.
Residual waste that cannot be recycled will be processed into a fuel for use by North West chemicals producer Ineos Chlor to provide energy for its plant at Runcorn, Cheshire.
The fuel will feed the new combined heat and power plant, which will produce electricity and steam to replace energy currently generated from non-renewable sources.
The upshot of the deal is that more than 75 per cent of Greater Manchester's waste will be taken away from landfill - the greatest amount of diversion among all local authorities across the UK.
Viridor Laing is a consortium of Viridor Waste Management, a subsidiary of the Pennon Group and John Laing.