The Canal and River Trust has secured planning permission to build two new wharves on the former Yorkshire Copper Works site on the Aire and Calder Navigation.
The charity, which looks after 2,000 miles of the nation’s canals, is hopeful of securing a £3.37m grant from West Yorkshire Combined Authority to start work on Stourton Wharf.
Initially the plan is to carry sand and gravel dredged from the North Sea by barge from Hull to Leeds, but there is potential for much more.
Subject to planning permission, in future refuse derived fuel – which comes from household and other waste – could be carried from Leeds to power plants in Hull and along the River Trent.
Barges were running up the Aire and Calder to Whitwood near Castleford until 2013 carrying aggregates, but stopped after a company merger.
Harbourmaster and freight planner Stuart McKenzie said they expected to move 200,000 tonnes of aggregate by barge in the first year or two – taking 7,000 wagons off the roads.
Although it represents only a tiny fraction of overall freight, it would be good for air quality and would bring back into use one of the country’s top freight waterways.
Mr McKenzie said: “Our contribution is a relatively modest one, but we still think it is worth doing. The Aire and Calder is one of the premium freight waterways in the country and is not used to its full potential.
“We have the barges, the locks, the infrastructure. Customers unfortunately prefer to use the road because it is that little bit cheaper and they know and understand it.”
Minister for the Northern Powerhouse Jake Berry backs the “pioneering” project.
He said it “will create a host of new economic opportunities not just for people in Leeds but throughout this key region of the Northern Powerhouse” in addition to easing traffic congestion.
And Leeds councillor James Lewis said the investment would reinstate the city’s waterways’ historic importance for moving goods.