The couple, who have not been publicly identified, were renovating their home in the Melbourne inner suburb of Malvern, according to Stonnington City Council spokesman Jim Carden.
They dropped off a load of garbage at the Stonnington waste collection center on Saturday, and drove home -- before realizing they had accidentally thrown away a small jewelry box containing an "impressive engagement and wedding ring," Carden said.
They frantically called the collection center, but it was closing, and they were told to return early the next day.
They returned at 4 a.m. "after a sleepless night," Carden said -- planning to follow the truck full of trash to a waste dump and rifle through the piles of garbage.
However, the trash collectors and city council workers opened the truck containing 30 tons (67,200 pounds) of trash -- cardboard boxes, broken furniture, grime and debris -- and finally located the couple's pink trash bag, with the jewelry box and rings inside.
Carden called the recovery "a little bit of Christmas magic," and praised the workers for going "above and beyond" to help the couple.
"We are pleased to have saved some memories and what we understand was highly valuable stuff both financially and sentimentally," he said, calling it a "fairytale outcome."
But he cautioned that it was an unusual case, and said the council cannot "readily empty the transfer stations looking for things people think they may have tossed out."
"Our guys are trained to work in a tough and risky environment and we don't allow people to just pick over tons of often dangerous materials with heavy machinery all around," he added.