Mayor Dianne Watts says about a quarter of the facility's project costs will come from the federal government and that a private partner will be chosen to design, build and operate it by 2015.
The mayor says Surrey collects waste from about 100,000 homes and that about 65 per cent of its residential garbage includes organics from commercial kitchen and yard waste.
City spokeswoman Tara Foslien says that ev entually, Surrey aims to be home to North America's only fully integrated organics waste management system.
It involves organic waste being picked up by a fleet of trucks that transport it to the biofuel facility, where waste will be processed into fuel to power the trucks.
Construction of the facility is expected to start next year.