The full council meeting accepted a committee recommendation to renew the 34-year and 364-day lease to Upper Clutha Recycling and the Environmental Society.
The recommendation said Wastebusters was run by a charitable society and sought the long-term lease of the site in order to "grow and plan into the future".
Under the council's community pricing policy, Wastebusters would pay nothing to occupy the site.
Although the site was not suitable for other uses because of its previous association with landfill, if it were to be leased commercially, it would cost about $24,000 a year.
Wastebusters manager Sue Coutts said the lease was important for the organisation so it had security going into the future.
This followed the council's decision in October to award the Wanaka recycling contract to Smart Environmental Ltd rather than the long-time server, Wanaka Wastebusters.
"Wastebusters delivers huge environmental benefits in the community and, getting into uncertain times, it is the cornerstone of changes that are coming," Mrs Coutts said.
The decision to renew the lease would be "totally in line with council policy", she said..
Councillor Simon Stamers-Smith asked if it was "very unusual" to give anyone a 34-year lease.
The tenure was specifically a day short of 35 years to avoid having to subdivide the land and create a separate title for it under the Resource Management Act.
Legal issues for the site included it being partly freehold land and partly gravel reserve, and there was also an unformed road cutting through the site, which would be closed.
