In this study, activated algae granule was formed by cultivating a mixed culture of the microalga Chlorella vulgaris and activated sludge in batch photobioreactors (PBRs). Without aeration, the granulation process was investigated through four different agitation speeds of 80, 120, 160, 200 rpm (shear stress of 0.04, 0.15, 0.35, 0.69 Pa). Hydrodynamic shear stress created by agitation affected the activated algae granulation through microeddies. The largest granule was achieved in the PBR with agitation speed of 200 rpm (R200) with shear stress of 0.69 Pa (size of 339 µm). In the other hand, lower shear stress in R160 (shear stress of 0.35 Pa) gave optimal results in terms of wastewater treatment efficiency and granule formation time (165 days of operation). Shear stress below 0.15 Pa (120 rpm) showed no granule formation during 220 days operation. While shear stress from 0.04–0.15 Pa could guarantee mass transfer for the entire co-culture without aeration, shear stress from 0.15–0.69 Pa was a suitable range for the granulation process of activated algae. This study reveals that activated algae granule formation through agitation mechanism is a promissing solution for wastewater treatment and microalgae biomass recovery to substantially increase the share of renewable energy in the global energy mix.