The increasing pressures of environmental regulation and the introduction of new policy frameworks by various nations have accelerated the popularization of industrial solid waste management and recovery, underscoring the transition towards a circular economy. This paradigm shift emphasizes the importance of material recovery, reuse, and recycling of industrial waste to minimize environmental impact and enhance sustainability. Despite the availability of individual approaches for waste recovery, there exists a significant gap in the systematic selection of optimal recovery pathways that facilitate the reintegration of materials into the production cycle. Addressing this gap, our study introduces a novel optimization model designed to identify the most efficient material circularity routes that leverage both the technical and biological cycles of the circular economy framework. Utilizing the Genetic Algorithm optimization tool in MATLAB, our model prioritizes pathways that maximize material recovery and profit generation simultaneously. This dual-objective function serves as the cornerstone of our analysis, ensuring a balanced approach to environmental sustainability and economic viability. The model's efficacy was tested on pre-calculated quantities of fabric waste generated by the Biyagama Export Processing Zone, providing a practical case study for its application. Our findings reveal diverse scenarios under which the model can allocate varying weights to each objective, demonstrating its flexibility and utility as a decision-making tool for stakeholders in the waste management sector. The results indicate that the model is not only capable of optimizing waste circularity pathways for maximum material recovery and profit generation but also offers a customizable framework that can adapt to the specific priorities of different stakeholders. This research contributes to the existing body of knowledge by filling a critical gap in the selection of sustainable waste recovery pathways, offering a practical, optimized, and scalable solution that can significantly advance the goals of the circular economy in the industrial sector.•Decision-making model for stakeholders in the waste management sector.•Model selects the best material recovery pathways.•Textile industrial fabric waste stream used as a pilot to test the model's effectiveness.