The facility, nicknamed "Murf", is a specialised plant that will receive, separate and prepare recyclable materials for marketing to end-user manufacturers.
The MRF will be fed with recyclables which will be collected from the new kerbside wheelie bins around the city, starting next week.
Dunedin City Council solid waste manager Ian Featherston said the facility was scheduled for completion by May 31 and would be operational soon after.
The site is situated next to the Green Island Landfill and will allow development of a resource recovery park where companies can cluster to share skills and resources, he said.
Those companies may include Wood Recyclers Ltd, Dunedin Concrete Crushing Ltd, Otago Metal Industries, which occupies the adjacent property; and other ventures such as computer and car-bumper recycling.
Mr Featherston said when all proposed industries were involved, the recovery park would be able to process cardboard, paper, glass, plastics 1-7 (including hard polystyrene, plastic shopping bags, and shrink and bale wrap), steel, aluminium, concrete and aggregates, treated and untreated wood, bricks, particle board and electronic waste.
The MRF will be operated by Fullcircle, a division of CarterHoltHarvey, which will use staff from Cargill Enterprises on the sort line to process the material. It is expected up to 70 people will be working on the 5000sq m site.
Mr Featherston said the Christchurch earthquake had caused a delay in the delivery of some 80-litre kerbside recycling collection bins.
The 80-litre bins were to have gone to homes that started recycling in the second week of the new system, from March 7.
Mr Featherston said the bins were likely to be delivered from March 10.
Letters had gone out to those affected, 278 homes spread across a variety of suburbs.
He apologised for the delay and asked those residents to hold on to recycling, or share a neighbour's bin in the meantime.
He said 600 blue 45-litre crates had been caught up in railway delays. They were to go to areas to which the recycling service had recently been extended.
He had bought temporary 30-litre bins, which would be sent to the Green Island and Saddle Hill areas.
