Wiltshire Council says it has been repaid almost £10.2m of the £12m it invested in Icelandic banks.
Several UK councils invested large sums of money in the banks due to their attractive interest rates, but lost out when the banks collapsed in 2008.
So far the council has been repaid £1.676m of the money invested in Landsbanki and about £8.5m from the administrators of Heritable Bank.
Councillor Dick Tonge said he was "very pleased" the money had been recovered.
Mr tonge, cabinet member for finance, said: "It avoids the council having to write them off as a bad debt."
The council said it expected to recover 95% of the £9m invested in Heritable Bank and all of the £3m deposit in Landsbanki.
A council spokesman added the recovery of assets and the winding up proceedings were "still ongoing and may not be concluded for a few more years".