Bachelor of Design (Industrial Design) graduate Ms McDonell won the $2,000 first prize with her green invention, The Fabricate Project, which demonstrates how people can upcycle textiles and damaged old clothes into desirable furniture.

The project aims to redirect textile waste from harmful disposal pathways and offers a range of sustainable furniture products for conscious consumers.

The winner was chosen by three expert judges in sustainability and design: Michael Chijoff, Founder of Chijoff & Co; Emily Ballyntyne-Brody, Director of Urban Reforestation; and Alan Pears, Adjunct Professor at RMIT's Centre for Design and founder of consultancy Sustainable Solutions.

Ms McDonell said she was thrilled to win the competition and have the opportunity to bring her sustainable ideas to a wider network.

"I'm extremely excited at the prospect of the expansion of the Fabricate Project and the continued development of the website creating a community of creative upcyclers," she said.

"So many textiles are incorrectly disposed of via charity shops and there are few alternatives at present for proper disposal within Australia.

"It's wonderful to have the opportunity now financially to conduct workshops to teach others and possibly to support incubator programs towards developing other uses for textile waste, brainstorming and campaigning towards a better disposal system.

"I'm so exited towards my future now - the competition was a great springboard platform to help the project expand and encourage any young designer to think sustainably and just have a go!"

Adjunct Professor Alan Pears said the judges' decision was a difficult one.

"What made the difference in favour of Michelle was that her entry was more than an interesting sustainable product and flexible DIY manufacturing technique - it focused on a waste problem she had identified through research," he said.

"Her website also provided an empowering approach, where people could see practical demonstrations of different techniques of using the waste materials, and upload their own efforts."

The competition runners-up, who each received $300, were Daniel Ong, Bachelor of Design (Industrial Design) graduate; Amy Chan, Bachelor of Design (Industrial Design) graduate; and Alvaro Maz, Master of International Urban and Environmental Management student.