A further $10m will be offered to businesses to recycle more in their daily operations, and $10m will go towards waste-for-energy initiatives for processors of waste that can’t be recycled.

More than $11m will be opened up for expressions of interest for treatment of hazardous waste to prevent further stockpiles from rogue operators across the state. And a $7m business innovation centre will work on waste solutions research, bringing together industry, universities and councils to develop new technologies.

The premier, Daniel Andrews, said the package was “the biggest transformation of our recycling system that our state has ever seen”.

“It is absolutely necessary given that China and other countries have made it very clear that we have to take responsibility for our waste and not simply ship it to the other side of the world.”

A day earlier, the state government announced a container deposit scheme by 2023, to bring Victoria into line with the rest of the nation.

Victorian households will also have to sort their waste into four bins as part of the overhaul, separating glass from other recyclables.

The new funding was welcomed by the chief executive of the Waste Management and Resource Recovery Association of Australia, Gayle Sloan, who said the infrastructure investment was key to expanding domestic markets for recycled products.

“By committing funding the Victorian government gives industry confidence that they are at the table with us, working with us to solve these challenges,” Sloan said in a statement. “Our essential industry alone cannot solve these recent challenges – it is a shared responsibility that requires all parts of the supply chain including government and the community to work together to solve”.

The managing director of Coca-Cola Amatil in Australia, Peter West, also supported the announcement, saying the company now produced 70% of its bottles from 100% recycled material.

“We want a local industry,” West said. “The material we have is a good first step, which is 16,000 tonnes of material that comes from Taiwan.

“We want that to be local product … We couldn’t even source that material in Australia today.”