The project, which is targeted at small and medium enterprises (SMEs) based in the capital, is a joint initiative by Zero Waste Scotland and Edinburgh Chamber of Commerce.
The city is one of four Scottish regions selected last year to receive free support and project funding for local businesses.
The chamber will deliver a range of activities to help identify opportunities for local business, and direct them towards available support and funding.
A circular economy clamps down on waste by keeping resources and products in use for as long as possible. It offers opportunities to businesses to develop new products and services which promote repeated use.
These include repair, or take-back services, or designing new products from another industry’s ‘waste’ through effective collaboration.
Zero Waste Scotland chief executive Iain Gulland said: “This ambitious initiative will unlock the potential for SMEs in the region, by thinking innovatively about business models.
“This is a terrific opportunity to help businesses in making the transition to a circular economy, that has the potential to create jobs, support sustainable business models and help the environment. Across Scotland, a circular economy could generate £3 billion of annual benefits.
“Scotland is at the cutting edge of developing a more circular economy, and was recently chosen to host the Circular Economy Hotspot Scotland, a major international trade mission, taking place later this year.”
Liz McAreavey, chief executive of Edinburgh Chamber of Commerce, said: “The circular economy will provide business with tremendous opportunities, in creating efficiencies, reducing waste, and in creating new products, services, wealth and jobs.
“The chamber is delighted to be working on a project to engage the Capital’s business community with these opportunities, and making a big contribution to future growth.”