The Drigg nuclear waste site is over 40 years old
A deal worth up to £500m has been agreed to manage low-level nuclear waste at the Drigg site in Cumbria.
Nuclear Waste Management Ltd (UKNWM) has been given the contract after promising £100m in savings by introducing new technologies.
The Nuclear Decommissioning Authority (NDA) spent two years considering the five-year contract for the 6km site, which is south of Sellafield.
Drigg contains waste from nuclear facilities, universities and hospitals.
Dr Ian Roxburgh, NDA chief executive officer, said: "This is a landmark occasion for many reasons.
"Primarily it is significant because it is through the competition process that we will bring innovation and new expertise to the programme to decommission and clean-up the UK's nuclear legacy.
"It is equally important as it means the NDA has delivered the first in a series of multi-million pound competitions."
The initial contract is for a period of five years with the potential of further extension periods, subject to performance and NDA management approval, up to a total of 17 years.
Dick Raaz, managing director of UKNWM, said: "UKNWM brings together a group of companies with world-beating experience in nuclear waste management.
"We believe that in partnership with the NDA, we can make a real difference."