Under the five-year contract, the council will deliver residual waste to Viridor’s Energy from Waste facility in Dunbar, East Lothian.
This will enable the council to cease landfilling biodegradable municipal solid waste in advance of the deadline imposed by the Scottish Government of 1 January 2026.
The council estimates up to 72,000 tonnes of residual waste will be treated through the contract each year.
Allan Gunn, ECO Communities and Place said: 'This is an extremely positive and important step for Highland. This contract provides the council with medium-term security of waste disposal outlets within Scotland.
'It will also result in lower carbon emissions from the council’s waste management activities.'
The contract will start on 1 January 2023 with a 3-year possible extension.