Environment Minister Simon Corbell said the Government would instead adopt a cheaper option of building a dedicated facility to sort organic matter such as food scraps from the usual household rubbish that is now put into the current green-coloured garbage bins.

Mr Corbell said a third-bin service would cost $20 million a year while a Residual Waste Materials Recovery Facility would cost $8 million a year.

The facility would likely be located near Mugga Lane and recover about 53 tonnes of organic waste per year by 2021 by to be converted to compost.

The Government based its decision on a report by consultants Hyder which found by 2021 a third bin service to collect organic food waste for Canberra households would cost ratepayers $418 per tonne of additional material recovered, compared with $88 a tonne for the Residual Waste Material Recovery Facility.

Mr Corbell said advice to the Government was that less than 50per cent of organic material would be collected in a third bin because it would require households to sort it themselves while the recovery facility would retrieve close to 100 per cent.

He said expressions of interest in the facility would probably be called next year but it would be a couple of years before it was up and running.

The recovery facility would sort the waste mechanically, with people putting garbage in their bin as usual.

The yellow-lidded bin would still take household paper, plastic and other recyclables.

''Nothing changes in terms of the number of bins at home. What changes is your green bin just got a lot greener because the organic material that goes into it will be recycled and householders don't have to change any of their behaviour,'' he said.

As a result of not having a third bin, householders would still have to take garden waste to the free drop-off points in the ACT.

''There'll be no change to garden waste. We achieve over 90per cent re-use of garden waste within the territory through either people self-hauling in their car or trailer to the free drop-off facilities that currently exist or through the use of commercial facilities like Trash Paks,'' he said.

Mr Corbell is due to issue the Government's waste strategy today for the next 14 years with the aim to have more than 90per cent of rubbish recovered and not put into landfill by 2025.

That would require 120,000t of waste per year being diverted from the ACT's landfill sites.

Mr Corbell said the ACT was now achieving about a 75 per cent resource recovery rate.

''Which is the best in the country and we aim to go to over 90 per cent which would be world-best practice,'' he said.

The Government also plans to meet that target by building a Mixed Commercial Waste Material Recovery Facility which will sort and collect glass, plastics and paper from the office, retail, hotel and hospitality sectors - waste that would usually go to landfill. That was expected to recycle up to 70,000t of waste per year by 2014.

The Government will also take ''further actions'' to enable the development of energy-from-waste facilities to produce renewable bioenergy through the conversion of wood waste, dirty paper, fabrics and other materials.

Greens spokeswoman Caroline Le Couteur said it was investigating the cost of a third-bin service and did not believe a Residual Waste Materials Recovery Facility was the answer to waste management because the compost would be contaminated by other waste such as batteries and even glass.

''The compost you get from it will never be very high quality and will only be used for mine site rehabilitation and forestry because it will have toxics in it,'' she said.

''Climate change is really important but soil fertility is also really important. We're not putting the nutrients back into the land.''

Ms Le Couteur said the Greens were investigating using a household bin for food and garden waste collected weekly while a landfill bin could be collected fortnightly.