The present research deals with the global challenge of managing industrial sludge with respect to sustainability and circular economy principles. It focuses on raw industrial sludge (IS-R) conversion into valuable biochars that can serve as efficient adsorbents for pharmaceuticals in industrial wastewater. Three biochars were produced through sludge pyrolysis at 750 °C either without modification (IS-R-B), or after pre-treatment with 1 M solution of ZnCl2 (IS–ZnCl2–B) or FeCl3 (IS–FeCl3–B). Compared to the pristine biochar, the modified sludge-derived biochars (SDBs) showed improved structural, textural, and surface chemical properties. As a result, IS-ZnCl2-B and IS-FeCl3-B had AMX adsorption capacities of 31.9 and 32.1 mg g−1 which were 41.2% and 42.0% higher than the non-modified biochar, respectively. Moreover, both modified SDBs effectively removed AMX under various experimental conditions, including the presence of competitive ions and over a wide pH range. The AMX removal was found to be spontaneous, endothermic, and primarily controlled by chemical reactions on a monolayer system. These findings suggest that biochars generated from pyrolysis of salt-modified industrial sludge can be used as effective materials for removing pharmaceuticals from water. Therefore, this study supports the concepts of circular economy and sustainable development by offering engineering solutions.