Two strategies were employed to modify the performance of the nano-niosome drug delivery system. Initially, the surface of the nano-niosomes underwent modification through the inclusion of polyethylene glycol, thereby altering its properties. Additionally, the core of the nano-niosomes was equipped with Fe3O4 magnetic nanoparticles to impart magnetic characteristics to the system. This study presents the development of PEGylated magnetic nanoniosomes (PMNios) for the co-delivery of artemisinin (ART) and metformin (MET) in cancer therapy, highlighting significant advancements in chemotherapeutic efficacy. The magnetization of the nano-niosomes facilitated the targeted delivery of drugs to specific tissues, while PEGylation improved the bioavailability of the nano-niosomes. These PEGylated magnetic niosomes (PMNios) were then loaded with artemisinin and metformin drugs. The synthesized PMNios were thoroughly evaluated in terms of zeta potential, size, morphology, and entrapment efficiency. The PMNios achieved a drug loading efficiency of 88%. They exhibited an average size of 298 nm, a polydispersity index of 0.32, and a zeta potential of − 19 mV, indicating the complete stability. SEM and TEM images of the PMNios revealed a spherical morphology. Subsequently, the PMNios were compared with other forms of nano-niosomes, including empty niosomes, non-magnetic niosomes, and non-PEGylated niosomes. The encapsulation of the nano-niosomes with magnetic nanoparticles allows for faster delivery of the encapsulated drugs to the tumor site, while PEGylation improved the stability, bioavailability, and controlled release of the PMNios. Furthermore, the in-vitro effectiveness of various formulations of the PMNios against A549, a lung cancer cell line, demonstrated that the PMNios exhibited appropriate toxicity towards cancer cell lines in the presence of an external magnetic field. Gene expression level of Bcl2 were lower for the PMNios-ART-MET system, whereas the level of Bax were higher than the other group. The PMNios-ART-MET system also demonstrated well internalization into the A549 cells and preponderant endocytosis. These findings underscore the novelty and potential of PMNios as a robust platform for the targeted co-delivery of hydrophilic and hydrophobic drugs, promising a new frontier in cancer therapy by enhancing the therapeutic index and minimizing side effects.