Phytoremediation is a promising green technology for the remediation of various industrial effluents. Notably, aquatic plants are widely applied to remove dyes and toxic metals from polluted environments. In the present study, the phytoremediation potency of aquatic macrophytes such as Pistia stratiotes L, Salvinia adnata Desv, and Hydrilla verticillata (L.f) Royle were assessed based on the removal capability of pollutants from dyeing effluent. Physicochemical characterizations were carried out for industrial wastewater collected from a cotton material dyeing unit located in the Karur District of Tamilnadu, India. The physicochemical characteristics of the dyeing effluent, such as color, odor, pH, total dissolved solids (TDS), alkalinity, acidity, chloride, sulfate, phosphate, nitrate, chemical oxygen demand (COD), fluoride, and toxic metal levels were determined. The core parameters such as total dissolved solid (TDS), chemical oxygen demand (COD), and chloride level were determined and found to be 6500 mg/L, 2400 mg/L, and 2050 mg/L, respectively, which exceeded the regulatory limit prescribed by the Central Pollution Control Board of India. The levels of toxic metals such as Hg, Ni, and Zn were under the acceptable concentration but Cr and Pb levels in the dyeing effluent were a little bit higher. The effluent was subjected to treatment with Pistia stratiotes L, Salvinia adnata Desv and Hydrilla verticillata (L.f) Royle separately. After the treatment, the toxic metal results were recorded as below detectable levels and the same results were obtained for all three aquatic plants samples used for treatment. Among the three plants, P. stratiotes L efficiently removed 86% of color, 66% of TDS, 77% of COD, and 61.33% of chloride. The variation in phytochemicals of the macrophytes was studied before and after treatment using GC–MS which revealed the reduction of ascorbic acid in the plant samples. The toxic effect of treated effluent was investigated by irrigating an ornamental plant, Impatiens balsamina L. The plant biomass P. stratiotes L obtained after the treatment process was subjected to manure production and its nutrient quality was proved, which can be applied as a soil conditioner. Among the aquatic plants, the results of P. stratiotes L indicated a higher remediation potential, which can be used as an ecologically benign method for treatment of industrial effluents and water bodies contaminated with dyeing effluents.