Gwynedd Council and BiogenGreenfinch have signed the final contract to build an anaerobic digestion facility.
Work is expected to begin on the 11,000 tonne per year food waste facility in September, with completion expected by the end of the summer in 2013.
The Welsh Government has given its blessing to the project, including a contribution towards the building of the infrastructure and the annual operating costs for the 15 year contract.
Gwynedd Council cabinet member for the environment Cllr Gareth Roberts said: “This is indeed fantastic news for Gwynedd and a major step towards achieving our ambitious recycling and composting targets. The innovative GwyriAD project which will likely be the first AD facility delivered by a Welsh council underlines our aim of finding creative and green solutions to deal with our waste.
“Residents throughout Gwynedd have shown their commitment to recycling, reusing and composting more of their waste. This exciting project will ensure that Gwynedd’s food waste, which is being collected on a weekly basis in communities across Gwynedd, can be treated in a more efficient way within the county.”