The site – filled with domestic waste – was uncovered close to Burnfoot, council sources confirmed to donegaldaily.com.
We understand several hundred tonnes of waste were dumped at the site.
Council investigators have monitored the site for several weeks, taking registration numbers and pictures of vehicles dumping at the site.
Legal advisers are now deciding how many people to recommend for prosecution.
There are fears that the council may have to be pick up a massive bill for cleaning up the site.
A number of people have been interviewed as part of the investigation.
“This was an illegal dump being run to make money. Simple as that,” said one council insider.
“We are confident that we can link this site to certain individuals,” he added.