The current study aimed to evaluate the hydrolysis of whole fat milk (WFM) and sweet whey (SW) using β-galactosidase (β-gal) after covalent immobilization onto activated alginate/tea waste (Alg/TW) beads as a novel carrier. The optimum temperature for free and Alg/TW/β-gal was 40 °C and the ideal pH was 7.0. However, Alg/TW/β-gal displayed better stabilities at high temperatures and a wide pH range. Additionally, the value of Km and Vmax for Alg/TW/β-gal was higher than the free enzyme. The Alg/TW/β-gal showed better residual activity (78.6 %) after 90 storage days at 4 °C. The reusability of Alg/TW/β-gal was very good as it conserved its full activity after 15 consecutive cycles and conserved 93 % of its initial activity after 10 cycles with ONPG (O-nitrophenyl-β-D-galactopyranoside) and lactose as a substrate, respectively. The impact of Alg/TW/β-gal on WFM and SW using HPLC analysis revealed a remarkable decrease in lactose concentration and increase of glucose and galactose concentrations. The SW exhibited higher degree of lactose hydrolysis (97.3 %) compared to WFM (62.4 %). Besides, SW had a prominent increase in total phenolic content (96.8 mg/L) compared to WFM (54.3 mg/L). The antioxidant activity had increased after enzyme treatment in both WFM and SW. The GC–MS analysis for volatile compounds identified twenty-five flavour constituents. Finally, Alg/TW/β-gal has a potential application for obtaining healthy, acceptable, and commercial dairy products of low lactose.