Mercia Waste Management will run the energy-from-waste plant at the Hartlebury Trading Estate, and has awarded contractor Hitachi Zosen Inova the main engineering and construction job.
Construction will take 33 months with commissioning of the plant due to begin in the spring of 2017.
Ian Barber, manager at Mercia, said: “After a diligent planning and financial negotiation process, we are delighted to be moving on to the construction phase.”
The project is needed to deliver sustainable waste management infrastructure for Worcestershire and Herefordshire and provide electricity for 20,000 homes.