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Members of the Queenstown Lakes District Council's infrastructure committee yesterday voted unanimously to remove the facility.
Late on Wednesday night, the committee received a bid from Wastebusters to take over the recycling contract at the facility for the remaining 12 months. It was unclear whether they also wanted to take on the waste contract.
Council maintenance and operations manager Erin Moogan said she did not think the council could "continue to put any contractor at risk".
The Hawea community was fully opposed to the removal of the facility and pleaded its case to Ms Moogan at a public meeting two weeks ago.
But issues of illegal dumping, contaminated recycling and health and safety risks to contractors proved to be too much.
The removal of the facility was still recommended, although the kerbside collection service would be doubled over the peak summer period, to cater for the influx of holidaymakers.