It is a bid to stop 13,000 tonnes of waste a year going to landfill.

Lake Macquarie City Council will introduce the plan, along with other initiatives, to massively increase the amount of domestic waste diverted from landfill from a current 21 per cent to 66 per cent.

But the rewards of success are enticing.

The council stands to gain $8.9 million over seven years from a state government rewards program if it meets the target.

A council study found 55 per cent of waste in bins was organic, with about half of that food and kitchen waste and half organic rubbish.

The council plans to upgrade its garden waste collection service by 2013 to stop 14,500 tonnes of organic waste a year going to landfill.

Another measure is upgrading the council's recycling collection service by 2011.

The study found that 20 per cent of rubbish in general waste bins could have been recycled.

"This highlights the need for a campaign to educate residents about recycling or extra space in recycling bins to alleviate a potential capacity problem," a council report said.

Audits will be done in October and January to investigate capacity constraints in recycling bins.

Improved recycling could prevent about 8500 tonnes of waste a year going to landfill, the report said.

An education program in disadvantaged areas was planned by 2011 to increase recycling participation and reduce contamination of recycled waste.

More events to collect second-hand goods are planned to stop 141 tonnes a year of textiles going to landfill.

The council aims to increase recycling in multi-unit buildings, which had a lower participation rate for recycling and higher contamination levels than single dwellings.