Changes will include the first doorstep recycling service for rural households and the appointment of four waste awareness officers.
Plastic bottle recycling facilities will be made available at all of the region's recycling centres.
Welcoming the decision, the Chairman of The Highland Council's TEC Services Committee, Councillor John Laing said: “This substantial amount of money highlights the Administration's commitment to reaching our recycling target of 40% by 2010, and shows the important emphasis we as a council put on preserving our environment.
He added: “I hope everyone will take advantage of these new services which will make recycling more convenient than ever before.”
At present, only householders living in urban areas of the Highlands receive fortnightly doorstep collections of recyclables through the council's in-house collection service.
These are sorted separately at the kerbside.
However, the council can buy five new vehicles and hire 13 extra staff to provide doorstep collections of paper, cards, cans and plastic in rural areas around Skye, Lochaber, Caithness, Easter Ross and Inverness.
This service will be monthly and commingled due to the logistics of collecting material over large distances.
Plastic bottle recycling facilities, which were previously piloted in Dingwall and Tain, will also be installed at recycling centres in Wick, Thurso, Alness, Inverness, Granish, Nairn and Fort William.
The plastic will be reprocessed in the South of Scotland, although the council said it would welcome the development of a local facility.
It is expected that all the service changes will be rolled out by the summer.
At the meeting, Councillors also agreed to continue to fund the social enterprise network, which delivers waste diversion services on behalf of the Council, for a further year.
Previously the network groups were funded through a grant from the national Strategic Waste Fund but this strand of funding has come to an end.
A review of the work of each group will be undertaken and a further report will be taken back to members of the TECS Committee.
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