The recycling initiative will use cellulose acetate in their filters to produce industrial products such as shipping pallets and tobacco extracted from them will be composted.
The Cigarette Waste Brigade pilot programme - the first of its kind in the world - launched with the installation of 110 new cigarette recycling receptacles on several blocks within four downtown Business Improvement Areas.
The receptacles, easily identified with stickers that say "Recycle Your Butts Here" are located in the Downtown Vancouver, West End, Robson Street, and Gastown Business Improvement Areas of Canada.
"We have heard loud and clear that people want easy and convenient ways to keep our downtown streets and public spaces clean," said Vancouver Mayor Gregor Robertson.
"Cigarette butts are a real source of litter downtown, and this innovative pilot project with TerraCycle will help keep toxic butts off our streets and out of the landfill.
"This is a great example of how we can move closer to our Greenest City goals, provide job opportunities for low-income residents, and keep our downtown looking great," said Robertson.
"Cigarette waste is the most littered item across the globe," said Nina Purewal, General Manager of TerraCycle Canada.
"We are thrilled that the City of Vancouver has joined us to become the first city in the world to implement an integrated cigarette waste disposal and recycling programme, and we are grateful for their commitment to help us eliminate this type of waste," said Purewal.
Through the programme, TerraCycle will supply the receptacles and cover costs related to installation, emptying receptacles, maintenance, collection and processing of waste, and evaluation.