Abstract The indiscriminate increasing the human population and development has posed extra burden on the soil and water resources. Micro-algae and cyanobacteria compared to other organisms are eco-friendly, larger cell size and efficient biomass production, makes them best and sustainable solution for the problems related to soil fertility and available water resources. Compared to chemical fertilizers, the cyanobacterial bio-fertilizer can act as supplements to fertilizer N contributing up to 30 kg N ha−1. These bio-agents are also considered as potential candidate for lipid content production because of their rapid biomass production efficiency. The micro-algae biomass can be used to produce biofuels. Large scale biomass production and harvesting of cyanobacteria and micro-algae in waste water or their integration cultivation in sewage and effluent treatment plants could be very useful for waste water treatment. There is the need to find out how the cyanobacterial technology can be applied cheaply enough at the local-village level while still being effective alternatives options for the chemical fertilizers. The micro-algae, adapted to local water and soil conditions, test ponds and soils should be being seeded with these bio-agents which are naturally occurring in local native habitats. The goal should be for farmers to be able to produce the efficient biomass producing micro-algal agents on-site to use in their own fields as bio-fertilizers and bio-fuel production. This review article reveals use of cyanobacteria and micro-algae in waste water treatments, slow release bio-fertilizer for sustainable agriculture and also as feed stock for eco-friendly bio-fuels generation.