If you live in a country where garbage is sorted than please dispose accordingly. If garbage is not sorted in your country please separate the batteries from the toy and dispose of them in the designated place.
In any case, the best way to dispose of a toy is to reuse it by giving it to a new happy baby. Make sure you clean the toy before giving it to a new baby. Also please check the toy to see that all parts are in place and it is not damaged.