Bin collections across parts of the county are carried out by the Greater Cambridge Shared Waste service, which is a partnership between the two councils.
There are four electric bin lorries in use at the moment, but the council said there was not enough existing capacity to power any more.
The plan is to have 18 EV lorries in operation by 2027.
The project is also expected to supply about 60% of the depot’s total energy supply.
Rosy Moore, executive councillor for environment, climate change and biodiversity at Cambridge City Council, said: “This is a landmark moment for cleaner, greener waste and recycling collections in Greater Cambridge.”
The Labour member said: “This project demonstrates how local councils can lead the way in tackling climate change by investing in clean energy and sustainable infrastructure.”
Natalie Warren-Green, Liberal Democrat councillor and lead cabinet member for environment at South Cambridgeshire District Council, said: “It’s not just about reducing emissions – it’s about creating a resilient, future-proof system that benefits residents and the environment.”
The work is due to be completed by the end of this year.