In urban areas with dense populations and high water demands, effective management of water resources is crucial for sustainable development. It includes optimizing water usage and recycling wastewater to balance supply and demand. Urban rivers, which now carry sewage year-round due to increased urban water consumption, are increasingly used for irrigation in peri-urban regions. This study aims to assess the suitability of an urban stream for irrigation compared to catchment groundwater, using hydrochemical parameters to evaluate water quality indices. Analysis of major ion distribution from upstream to downstream reveals a significant increase of TDS (r2 = 0.65; p < 0.001) in the surface water and a decrease (r2 = 0.93; p < 0.001) in groundwater samples. The calculated Weighted Arithmetic-Water Quality Index (WA-WQI) indicates that around 85% and 75% of surface water and groundwater samples from the Musi river are classified as very poor to unsuitable for any use, highlighting critical pollution levels. Based on irrigation suitability indices, only 16% of the surface water samples and 60% of the groundwater samples are suitable for irrigation. The nitrate concentration increased from less than 10 mg l−1 in the upstream region to over 100 mg l−1 in the urban stretch. Nitrogen-Phosphate-Potassium (NPK) ratios across the basin are exceptionally higher, representing crops irrigated using the Musi river water might not require fertilizer applications. The adoption of fertilizer application concerning supplied water hydrochemistry, particularly the NPK ratio, might limit the excess usage of fertilizer and benefit farmers. Additionally, this practice may also limits the excess input of nitrate to the groundwater in the Musi river basin.