"It's about looking at all sustainable alternatives to fuel efficiency."
The Prius C was estimated to use only 3.9 litres of fuel per 100 kilometres.
By purchasing the vehicle, the council said it wanted to promote a cleaner image and to help locals choose greener alternatives.
Planning and regulatory services group manager John O'Shaughnessy said this change could help local consumers save on fuel and other maintenance costs.
"This will lower costs for them at the petrol pump and encourage people to buy more sustainable, energy-saving cars", Mr O'Shaughnessy said.
The Prius would be used by all council workers and "will be mainly driven around town to get the best value out of the car", he said.
The incentive to buy the Prius was part of a price deal the council had with Toyota, which comes under the Government procurement contract, allowing a significant saving on the normal retail price.
The deal with Toyota also included replacing every council vehicle per 100,000 kilometres.