A $37 million package has been announced to cut the amount of recycling going to Victorian landfill and create new markets for recycled products.

The state Labor government unveiled the plan on Tuesday, following China’s decision earlier this year to restrict the import of recyclable materials.

“This plan will create a more stable and productive recycling sector, improving the quality of recycled materials and developing new markets for them,” Environment Minister Lily D’Ambrosio said.

The package includes an $8.3 million expansion of a fund aimed at improving the quality of up to 100,000 tonnes of recycled material.

A further $2 million will go to developing markets for recycled material, while an education program on what can be recycled could potentially cut contaminated recycling going to landfill, by around 40,000 tonnes a year.

The government will also help drive demand for products containing recycled materials through procurement.

The package includes $13 million in temporary relief announced in February for councils and industry to support the ongoing kerbside collection of household recyclable waste, after China’s decision to restrict recyclable imports.

“We’re delivering a new plan for the future of recycling in Victoria – to reduce waste and costs to households, and build a more resilient recycling sector in Victoria,” D’Ambrosio said.