A new waste transfer station will be built at the Trehir landfill site near Llanbradach after councillors gave the scheme the go go ahead.
The waste transfer station will act as a starting point for waste to be bulked together before it’s loaded on to larger vehicles ready to be taken for processing outside the area.
No on-site treatment of waste would take place at the facility.
It will deal with general household refuse and recyclable material generated by properties in the Caerphilly basin.
Councillor Lyn Ackerman, Caerphilly County Borough Council’s cabinet member for the environment, said: “We appreciate that developments of this nature can be controversial and we are keen to ensure this proposed scheme will be clean, green and efficient in order to maximise our opportunities to sort waste in the best way possible.
“This decision is a positive step forward and fits alongside the other key partnership schemes that we are currently involved with to help improve our waste management.”
Trehir could be operational by 2012.
Councillors at the Tuesday night meeting also considered the future of the former St Ives printing works at Dyffryn Business Park, near Ystrad Mynach.
The local authority bought the building for £5.2 million in November 2005 with the intention of turning it into a recycling centre, although the development fell through.
A council report looking into a possible sale will be considered by councillors in the future.