Dudley Council is on the lookout for a new household recycling centre for residents to use after walking away from a deal with Wolverhampton Council for the Anchor Lane tip in Bilston.
Bosses say the authority is now close to signing a deal for use of the Shidas Lane tip in Oldbury.
It comes after Labour-run Wolverhampton Council had attempted to renegotiate a £200,000-a-year deal for Anchor Lane – asking Conservative-run Dudley Council to pay around £133,000 a year more.
Wolverhampton Council defended the increase, saying it was only right that Dudley paid its fair share of the £1m-a-year running costs, while Dudley Council said the rise was "extortionate" and refused to pay.
The row has left Dudley residents banned from using Anchor Lane. They currently only have access to the tip in Stourbridge, which has seen its opening hours extended in a bid to cater for increased demand.
Dudley Council leader Patrick Harley said a new deal with Sandwell Council was close to being agreed.
It would see Dudley Council pay £100,000-a-year for residents to share use of the Shidas Lane site from Monday and Friday, with only Sandwell residents allowed to use it on weekends.
Councillor Harley said: "Sandwell have said they have got capacity during the week that we can use, but not at weekends.
"We have not signed on the dotted line yet, but if we end up giving them £100,000 – and bear in mind it's cost £100,000 to extend Stourbridge as well – we'll be in the same position as we were before.
"Hopefully we can get this done very quickly."
Asked about the potential deal with Dudley Council, Councillor Maria Crompton, Labour leader of Sandwell Council, said: "It is still being discussed. I can't really say anymore than that at the moment."
Wolverhampton Council said the £200,000-a-year deal had been in place for Anchor Lane since 2008-09. The authority said it was wrong that taxpayers in the city were subsidising Dudley residents, who accounted for 32 per cent of visitors to the site.
Shidas Lane is a drive of around 25 minutes from Sedgley, while the journey to Anchor Lane takes around half the time.