The initiative, headed by polytechnic student and project co-ordinator Finn Boyle, is the largest single recipient among more than 100 grants - together totalling $421,624.45 - handed out by the DCC grants subcommittee recently.
The composting hub aimed to significantly upgrade the polytechnic's ability to divert organic waste away from landfill, and to teach students, staff and the wider community new skills, Mr Boyle said.
Its design and development would involve as many students, staff and departments as possible, to give them a "real-world project" to work on, he said.
It would be developed on a "pocket" of council land inside the campus, and use composting and non-composting techniques to process more organic waste generated by the polytechnic.
But it could also be used by the wider community in time, through public workshops and even a collection service for surrounding businesses, he said.
"I think more and more people want to see those changes in their own lives and their communities, and especially businesses. We're looking to try and fill that gap."
The grant for the composting initiative was among those approved at the latest meeting of the DCC's grants subcommittee, which met in May to finalise distributions to groups and projects involved in the arts, community events, waste minimisation and biodiversity initiatives.
Most grants were less than $5000, while the next-biggest grants - of $20,000 each - went to the Ake Ake Theatre Company and Fusion Productions.
Since the May meeting, two further meetings of the grants subcommittee have been held, the first, on June 26, focusing on major and premier community events funding.
The meeting was held in non-public and had $508,700 to distribute, but had received 12 applications together seeking $579,599.
The second meeting, for city service city project grants, was held on Wednesday to allocate $408,100, but was also oversubscribed, having received 24 applications together seeking about $677,000.
Decisions from both meetings would be announced over the next two weeks.
