Merseyside Waste Disposal Authority and SITA UK have signed the £1bn contract for managing the sub-region's municipal waste for the next 30 years following a protracted procurement process.
The financial close of the contract will trigger more than £100m of savings to the authority and its partner councils over current landfill costs during the life of the contract.
SITA UK will dispose of the waste at a new combined heat and power energy-from-waste plant at the Wilton International site in Teesside.
Waste will be transported from a new rail hub at the Potter Group Rail Freight Terminal at Kirkby in Knowsley.
More than 92% of the contracting authority's residual waste, 430,000 tonnes a year, is expected to be diverted from landfill.
The procurement process lasted for seven years and faced the withdrawal of £90m Waste Infrastructure Credits by DEFRA in February 2013 and a legal challenge to the preferred bidder choice last year from runner-up Covanta Energy.
The Wilton Energy from Waste plant is expected to take two years to build and the contract is expected to start handling waste in 2016, with the rail terminal development in Kirkby starting in 2014.