Wellington City Council has signed a deal with a construction consortium to build a new sewage sludge treatment plant at Moa Point.
Deputy mayor Laurie Foon said the plant would reduce the volume of sludge by up to 80 percent - the equivalent of 11 Olympic-sized swimming pools a year.
That was expected to cut carbon emissions from sewage treatment by up to 60 percent, and represented a big step toward meeting the council's goal of being net zero carbon capital by 2050, Foon said.
"Currently sludge is mixed with general waste and buried at landfill, so the sludge minimisation facility is a key piece in the puzzle to enable our zero-waste strategy."
McConnell Dowell Constructors Ltd and HEB Construction Ltd have formed a joint venture to build the first stage of the new plant.
The council hoped to have it running in 2026, when the existing consents for dumping the sludge at landfill expire.
The capital's sewage problems became particularly urgent in January 2020, when the pipes carrying sludge from Moa Point to Carey's Gally failed, which meant waste had to be transported by trucks for several months.
Council chief infrastructure officer Siohban Procter said it had taken months of work to get to the point of signing a contract.
"This is a huge infrastructure project, and the first facility of its type in New Zealand. We're very proud of the fact we have brought such a good team on board that has such vast experience in this field."
The council intends to fund most of the project from a levy on ratepayers, under the Infrastructure Funding and Financing Act 2020.
It is the first time Wellington City Council has applied to use the act, and only the second time the tool has been used for an infrastructure project.
Funding will be confirmed by early August.
The total cost of the project is estimated at $370 million.