The Indian government approved the controversial clean-up proposal for the site where a gas leak killed thousands in 1984.
The plan to have five special flights take the toxic waste to an as yet unnamed disposal site in Germany was approved by India's Interior Minister P. Chidamabaram and other senior ministers at a meeting in New Delhi.
"The ministers have given a green signal," a senior ministry official told news agency AFP, declining to be named. Other sources say the Indian government will pay €3.6 million for the project.
"The German Society for International Cooperation (GIZ) has been awarded the contract to transport the waste to Germany for disposal," he said.
Bonn-based GIZ is a government-run enterprise that works on international environmental issues and sustainable development.
Bhopal was the scene of the world's worst industrial accident in 1984 when the pesticide factory leaked toxic gas into nearby slums, killing thousands instantly and tens of thousands more over the following years.
Tonnes of chemical waste previously produced by the plant were left in pits around the site, polluting local water supplies. Residents have been campaigning for years for a thorough clean-up of the factory and the surrounding area.
Many experts believe that the presence of toxic waste has resulted in more birth defects and illnesses among successive generations of people living near the plant.
According to GIZ, the waste to be flown to Germany is not connected with the poison that leaked in the accident. Hans-Hermann Dube from GIZ claimed that analysis had shown the material heading for Germany contained low levels of pesticide and heavy metals.
Environmental group Greenpeace said it supported the clean-up idea but was not sure whether it made sense to send the waste to Germany.