The facility will sort dry recyclables, such as plastic bottles, cardboard, newspapers, magazines and metals, and enable the mill to source high-quality paper from co-mingled sources. Construction on the site will start immediately and is estimated to be completed by January 2011.

Once up and running at full capacity, 160 jobs will be created in order to sort 200,000 tonnes of recyclable material, of which 120,000 tonnes will be newspapers and magazines.

David Ingham, UPM Shotton general manager, said: "Our vision for UPM Shotton is to be the frontrunner in creating value from renewable and recyclable materials.

"Building a materials recovery facility at the site is a natural step towards this vision."

The investment further supports UPM's development to rebrand itself as The Biofore Company, which Ingham said aims to creates value from renewable and recyclable materials with sustainable developments.

UPM Shotton Paper is part of UPM and annually recovers around 640,000 tonnes of newspapers and magazines. It is the largest newsprint mill in the UK, producing 100% recycled newsprint.

The Materials Recovery Facility investment has been supported by the Welsh Assembly Government, with a £1.7m Single Investment Fund grant.

Previous investments by UPM at the site have included a renewable energy plant, which began operating in 2006.