Shoppers in Toronto will have to pay a nickel for every throwaway plastic bag they take from retailers starting June 1, 2009 under a waste-management plan Toronto city council approved in a vote.

Councillors passed the controversial packaging plan with vote of 30 to 13.

"I think this is a great green day for the city of Toronto, it's great for the environment, it's great for tax payers," Glenn De Baeremaker, councillor for Ward 38, Scarborough, told CTV Toronto on Tuesday.

Shortly after the decision was reached, some city staff vowed to launch a legal battle in order to strike down the bill.

Coun. Denzil Minnan-Wong for Don Valley East Ward 34 said the plan doesn't do enough to meet the city's waste diversion targets.

"We're headed to court on this," Minnan-Wong told CTV Toronto on Tuesday, adding the city has no authority to legislate which items retailers must charge.

Some of Canada's largest grocery chains, such as Loblaws, Metro and Sobey's, negotiated the $0.05 bag charge with city officials prior to Tuesday's vote.

"After the third or fourth time we have to pay for (plastic bags), then yeah, we will remember to bring the ones we own already," one shopper told CTV Toronto on Tuesday.

It's up to the individual retailer to decide what to do with any new revenue from the bag fee, Stuart Green, a spokesperson for Mayor David Miller said.

"We don't have the power to tell them what to do with it, we simply set the price point as deterrent for consumers," Green told ctvtoronto.ca on Wednesday.

On Thursday, Sobey's announced plans to redirect new funds to various environmental and sustainability initiatives in the city.

A senior Loblaws executive announced last week any revenue from the $0.05 charge will be reinvested in staff training, customer education and reusable bags and boxes programs.

Despite industry lobbying to block the measure, councillors also voted to ban the sale and distribution of bottled water at City Hall and at civic centres, effective immediately.

The plan will also phase out plastic water bottles at other city-owned facilities, such as arenas, theatres and the Metro Toronto Zoo over the next three years.

The ban will force consumers to buy less-healthy drink options such as sugary juices and soft drinks, argued Coun. Doug Holyday, Ward 3, Etobicoke Centre.

Miller told reporters on Tuesday the city already produces its own high-quality tap water and its facilities don't need to be selling bottled water.

By 2011, the sale of any container that can't be recycled will also be prohibited from city property. Restaurants will also be forced to use only recyclable plastic take-out containers.

In early November, a proposed province-wide ban on the sale of plastic water bottles was struck down in the Ontario legislature.

Several municipalities and school boards have already voted to eliminate sales of water bottles at their facilities, arguing they are a hazard to the environment.

With a report from CTV's Zuraidah Alman and files from The Canadian Press