The contract runs for an initial 14 years with the potential for a seven-year extension. The value is up to £126m.
From April 2012, May Gurney will collect and recycle waste from 147,000 households across Cheshire West and Chester.
May Gurney’s bid will reduce costs by more than the council's original target of 15%, or £1.58m a year. Chief executive Philip Fellowes-Prynne said: "May Gurney continues to consolidate its position as one of the UK's leading providers of front-line services in the municipal recycling and waste markets.”