More than 30,000 tonnes of Bristol's non-recyclable waste will be turned into renewable energy from 2006, after plans for a new plant were approved. The city council gave the go ahead to pilot an advanced thermal conversion plant at a meeting on Wednesday night.
Up to 1.8 Megawatts of renewable power and heat will be generated from the waste to power local firms each year.
The move will help Bristol meet EU targets set for reducing the amount of waste that goes into landfill sites.
The technology used in the treatment plant has previously been used to dispose of clinical waste.
Cllr Matthew Symonds said: "As the first city in the UK to introduce a doorstep recycling collection scheme it is entirely appropriate that we should be at the forefront of testing this kind of approach to reducing landfill waste."
The decision means the council can begin negotiations with Compact Power over the cost of building the plant, and its legal implications.
"We now have the chance to show that the technology we have pioneered in Avonmouth can handle significant volumes of municipal waste," said Nic Cooper, chairman of Compact Power.
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