Richard Lochhead, environment minister, said it is hoped Dunbar, East Lothian, will become the first area in Scotland to earn the title of "Zero Waste Town" by increasing recycling and reducing waste under the campaign.
The pilot project, which could be replicated around Scotland, includes plans to reduce litter such as on-street "recycle on-the-go bins" which fit in with the town's historic landscapes.
It will also mean opening a facility to help make re-using goods easier and teaching people about recycling.
The project will be coordinated by community group Sustaining Dunbar, which will work with Scottish Government-funded Zero Waste Scotland, East Lothian Council and local businesses.
Mr Lochhead said the town had set a "fantastic example" in its bid.
Brian Grindley, chairman of Sustaining Dunbar, said: "We have already spoken to a wide range of organisations, businesses and individuals throughout the community and received a hugely positive response to this project."