Strategies for reducing cadmium (Cd) content in polluted farmland soils are currently limited. A type of composite with nanoparticles incorporated into a hydrogel have been developed to efficiently remove heavy metals from sewage, but their application in soils faces challenges, such as organic hydrogel degradation due to oxygen exposure and slow Cd2+ release from soil constituents. To overcome these challenges, a composite with superior stability for long-term application in soil is required. In this study, ferrous sulfide (FeS) nanoparticle@lignin hydrogel composites were developed. The lignin-based hydrogels inherited lignin’s natural mechanical and environmental stability and the FeS nanoparticles efficiently adsorbed Cd2+ and enhanced Cd2+ desorption from soils by producing H+. The high sorption capacity (833.3 g kg−1) of the composite was attributed to four proposed mechanisms, including cadmium sulfide (CdS) precipitation via chemical reaction (84.06%), lignin complexation (13.19%), hydrogel swelling (0.61%), and nanoparticle sorption (2.15%). In addition, Fe2+ displaced from the composite was gradually oxidized to form solid iron oxide hydroxide, which increased Cd2+ sorption. The composite significantly reduced the total, surfactant-soluble, and fixed Cd in heavily and lightly polluted paddy soils by 22.4–49.6%, 13.5–68.6%, and 40.1–16.6%, respectively, in 7 days.