A worker in the recycling centre in the eastern town of Wiesenbad found the baby's body on a conveyor belt in a sorting area for recyclables, Chemnitz police spokesman Frank Fischer told German news agency DPA.
Police said they planned an autopsy on the baby's body and would investigate where the trash found near the child had originated. Police did not release details on the child's age or gender.
Authorities are also investigating the death of another baby in Saxony found in an attic in the town of Elsterberg on Sunday. A couple found the child's body wrapped in a handkerchief in a cardboard box during their spring cleaning, while investigating a terrible smell in the attic.
The couple's 22-year-old daughter, a resident of the southern German city of Munich, admitted to hiding her baby's body in the attic of her childhood home. She told police the child, a girl, was stillborn in November, and that she brought the body to her parents' house in December. The woman said no one - including her ex-boyfriend, with whom she lived - had noticed her pregnancy.
The woman was taken into custody in Munich, but prosecutors later released her after the autopsy could not rule out the baby being stillborn.
Chancellor Angela Merkel and the premiers of Germany's federal states called for new regulations in December on preventative medical checkups in the wake of a spate of child abuse and death cases last year.
A German appeals court on April 7 also confirmed a 15-year prison sentence handed to another woman for killing eight of her newborn babies in the country's worst post-war infanticide case. The court in Frankfurt an der Oder in eastern Germany found that the fact 42-year-old Sabine Hilschenz was an alcoholic did not reduce her accountability for the crime.