This will be the first time such a service, which must involve the Waitaki Resource Recovery Trust, will be available in the district.
It is part of solid waste services overhaul the council has been considering for two years The trust was not originally involved in a request for proposals.
The council asked Delta Utility Services Ltd and Envirowaste Services for those earlier this year.
Fears the trust's Oamaru Resource Recovery Park in Chelmer St would close as a result prompted pressure from the community to have the trust involved.
However, council staff now believed the trust should be appointed the preferred party to manage recycling, at least for the term of the initial contract.
As a result of that community pressure, in May the council decided to drop its three-bin proposal for kerbside waste collection and recycling.
The council then decided it needed to implement a one-wheelie-bin kerbside recycling collection and processing service as quickly as possible to reduce the amount of rubbish going into the Oamaru and Palmerston landfills, which were filling up.
Green waste and residual waste will be addressed later.
Cr Alistair Mavor said the latest recycling proposal was the "first step on a long path" to get maximum diversion of waste from landfills.
The council has now widened its net to include the trust and has requested it be included "as a nominated party" in proposals it has asked for from council-owned Whitestone Contracting Ltd, Delta, Envirowaste and Transpacific Industries Group (NZ) Ltd.
The provision of the kerbside recycling service was not being put out to open tender because the trust was the community's preferred provider of recycling management services, assets group manager Neil Jorgensen explained.
The four parties selected to tender represented a sufficient range of expertise and experience to ensure the process would be competitive.
However, Cr Peter Twiss said the recycling service was a "big contract" and should go out to public tender.
Ratepayers were criticising the council for spending money, yet the council was proposing to approach selected tenderers, never mind the cost to ratepayers.
