Public procurement has been studied by numerous researchers and is considered to be an effective instrument for leading public and private actors to implement more sustainable practices. For researchers, public procurement can be leveraged to develop innovative practices oriented towards sustainability and create new markets for eco-friendly products. However, there is still a paucity of empirical evidence on the mechanisms by which public procurement can effectively stimulate sustainable innovation and foster the development of greener markets in relation to circular economy. To shed light on the emerging issue of circular public procurement, we use a qualitative method relying on an empirical case relating to a public tender in Denmark. Our research shows that public procurement can be studied as a design activity and clarifies the mechanisms by which public procurement can stimulate sustainable innovation in organizations, creating opportunities for collective innovative practices. Furthermore, we shed light on the process through which circular public procurement can create green markets, defining the qualities of the goods to be exchanged.