Associated Newspapers and News International have reached a joint agreement with Westminster City Council to pay for 64 recycling bins to be placed around central London.
The deal comes after the council threatened earlier this year to ban the two London free newspapers, Associated's London Lite and News International rival thelondonpaper, if they did not contribute to the cost of clearing up discarded papers each night.
The council - which oversees a large part of Central London, including Victoria and Charing Cross mainline rail stations - said in April that the two free papers, since they launched last August, had created an extra 1,000 tonnes of waste.
Under today's agreement, Associated will pay for 32 London Lite-branded bins around Victoria station and Leicester Square and thelondonpaper will fund another 32 bins around Charing Cross and Oxford Circus.
The Associated director of free newspapers, Steve Auckland, told Press Gazette the agreement had taken "a long time to come", but the recycling deal would now come into effect within the next two months.
"We spoke to the councils last October and we said there could be issues [with recycling]," Auckland said. "We're obviously trying to work responsibly - we're not putting too many copies out, and we want to get our merchandisers off the street by 7.30pm."
The two publishers will recycle the contents of the bins and will also carry out regular litter collections in addition to the council's street sweeping programme.
The cabinet member for street environment on Westminster City Council, Councillor Alan Bradley said: "I'm very pleased that both publishers have agreed to help tackle the problem of newspaper litter voluntarily, which was always our favoured option.
'This has been a complex matter, and there are some details we need to finalise, but I look forward to all parties working together to ensure Westminster's streets are kept clean and that as much waste newspaper as possible is recycled.
'I'm confident we'll see the benefit of all the hard work put into this once the relevant planning and advertising consents have been obtained and new bins delivered."
Thelondonpaper general manager Ian Clark said: 'Although the London Lite has grudgingly matched our voluntary agreement with Westminster, Lite's record in this area is less than impressive when compared to thelondonpaper.
'It is disappointing that Associated's other titles, The Evening Standard and Metro, have declined to play their part in this voluntary scheme."