The rubbish and recycling service is a key part in the council's waste management and minimisation plan, which aims to help divert 150,000 tonnes of waste away from landfill in 10 years.
Mayor Paula Southgate said the award was not just for the council, but for the city. 
"Everyone had to get onboard and make this change and the vast majority of people have.
"I'm really proud of that because the project has had a huge and positive impact. Hamilton has been an absolute leader in this space and it's wonderful to see that recognised and celebrated."
The annual LGNZ awards, held in Blenheim last week, saw all 78 local authorities celebrating successful projects that help improve the wellbeing of their local communities.
The other finalists in the environmental wellbeing category were Auckland Council/ Waiheke Resources Trust for its Love our Wetlands Waiheke programme and Canterbury Regional Council (Environment Canterbury) for its Whakaora Te Ahuriri project that creates a constructed wetland at Ahuriri Lagoon.