In prefabricated interior wall construction, it is necessary to reduce the material weight as much as possible without sacrificing the strength. This study proposes a novel method by shelling spherical absorbent polymer (SAP) with building phosphogypsum (BPG) to manufacture hollow particles and the associated lightweight block. The apparent density, unconfined compressive strength (UCS) and hydration heat of lightweight blocks were measured for comparative analysis, the water release mechanism of the SAP-based hollow particles was revealed by mercury intrusion porosimetry (MIP) and scanning electron microscope (SEM) tests. The results indicated that the inclusion of hollow particles reduced the apparent density of the blocks by 23.68% and 14.41% for OPC and BPG, respectively. BPG hollow particle is more effective in speeding up the block's early strength than OPC counterpart. In addition, both unshelled and shelled SAP-based blocks can delay the occurrence of the heat release peak, while the latter exhibits better mechanical properties and geometric stability than the former. SAP particles can serve as a water reservoir to facilitate internal curing, which is beneficial to the weight reduction, strength formation, and heat releasing of blocks. Microscopic tests indicated that the fraction of large pores increased while the small pores decreased in shelled hollow particle block compared with pure OPC block. Beyond which, it was noticed that the needle-shaped ettringite tends to generate between the interface of shelled hollow particle and OPC matrix, which plays a positive role in the overall strength of the block. The proposed SAP-based hollow particle block can not only reduce the overall building weight but also promotes the efficient utilization of waste phosphogypsum, resulting in both economic and environmental benefits.