The council will make an estimated £280,000 this year by selling their recycled plastic cans, card and paper.
The recycled goods collected by St Albans City and District Council is being bundled and sold to Pearce Recycling Company Limited.
The St Albans-based company has been responsible for the receipt, handling and sale of paper and cardboard for the council on an informal basis since last year. It has also recently taken on plastics and cans on the same basis.
At a council meeting on Tuesday July 22, councillors endorsed proposals to formalise this arrangement by offering the recycling company a one year contract for these recyclable materials.
The council said they will spend the £280,000 per annum on public services.
Councillor Daniel Chichester-Miles, portfolio holder for environment at the council, said: "The proposed arrangement means that income from the recyclable materials can be spent on public services for the benefit of residents.
"It is important to remember that the more people recycle paper, card, plastics and tin cans, the more money will be available for this purpose."