The investment, which will aim to improve recycling rates and cut the amount of waste going to landfill, comes from the Scottish Government's Zero Waste Fund for 2008/09.
The Fund will also be used to trial food waste collection in six local authority areas.
The announcement comes on the same day that the British Retail Consortium have agreed a 50% reduction in carrier bag use across the rest of the UK, three months after the Scottish Retail Consortium agreed the same target for north of the border.
Cabinet Secretary for the Environment Richard Lochhead said: "This considerable investment will not only help meet our challenging targets, it will also put in place an improved infrastructure to deal with recycled material, increasing the efficiency and effectiveness of services, which in turn will contribute to Scotland's economic recovery.
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"Local authorities – along with businesses and individuals – have done much to improve Scotland's performance on waste but there is more to be done if Scotland is to truly become and cleaner, greener place."
Councillor Alison Hay, Regeneration and Sustainable Development Spokesperson at the Convention of Scottish Local Authorities (COSLA) welcomed the announcement: "This £17.877m for councils and food waste trials is a valuable addition to the money already available and will help us build on the continuing success of councils in pushing up recycling rates year on year.
"Local Authorities in Scotland are committed to working towards zero waste as an extension of the waste hierarchy – put simply lets reduce the waste we put into the system first and foremost, re-use it wherever possible, recycle as much as we can and recover energy as a final resort. These all form part of the valuable approach to reduce or eliminate waste going to landfill. "
(GK/JM)
