Moray Council, landowner the Crown Estate and contractor Renewable Power Systems are involved in the plan to install gas collection equipment on the landfill at Nether Dallachy in Spey Bay. Generators are expected to produce 800kW a year for at least 20 years.
"As an authority we have a duty to explore every avenue that makes the most of our natural assets," said council convener George McIntyre.
"What we have achieved here is to turn what was a waste management problem into a profitable project that will help us protect the environment. I am delighted to see this development progress," he added.
Nether Dallachy is the council's only landfill site and is expected to be full to capacity by 2020.
Head of the Crown Estate in Scotland Alan Laidlaw said the organisation is keen to adopt more environmentally-friendly practices.