Abstract We propose a new ‘Bi-Reduced Space’ approach to solving 3D Variational Data Assimilation using Convolutional Autoencoders. We prove that our approach has the same solution as previous methods but has significantly lower computational complexity; in other words, we reduce the computational cost without affecting the data assimilation accuracy. We tested our proposal with data from a real-world application: a pollution model of a site in Elephant and Castle (London, UK) and found that we could (1) reduce the size of the background covariance matrix representation by O ( 1 0 3 ) , and (2) increase our data assimilation accuracy with respect to existing reduced space methods.