The world-first facility already has full planning permission and will be developed in Northwich.
It will have an annual capacity of 120,000 tonnes of waste, equivalent to the waste from almost 110,000 UK households.
DONG Energy's new technology, Renescience, will be used to handle unsorted household waste, without prior treatment, using enzymes, and convert it into biogas as well as recyclable plastics and metals.
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The biogas is converted to green power via gas engines.
It has been tested at a demonstration plant in Copenhagen since 2009.
Construction work is expected to begin later this month, with the plant being commissioned in early 2017.
Brent Cheshire, DONG Energy's UK Country Chairman, said: "It's fantastic to see the world's first bio plant of this type being built in Northwich, underlining the UK is once again leading the way in renewable energy. This new plant also highlights our commitment to investing in the Northern Powerhouse.
"REnescience is a brilliant new technology and generates as many resources as possible from everyday household waste. This new bio plant will see us handling waste in a much smarter way."
(LM/MH)
