A novel green capsule for self-healing cementitious material using a combination of waste-based materials with an inorganic substance was developed. A mix of alum sludge (AS), a typical waste from the water industry, and calcium hydroxide were used as the primary healing agents. Also, two types of natural and synthetic absorbent polymers (AP), microcrystalline cellulose (MCC) and sodium polyacrylate (SPA), were added to the core mixture to assess their impact on the healing efficiency. The morphology of the produced capsules, the self-healing proficiency of cracked mortars, and the resulting healing materials were characterised. Outcomes revealed that cracks up to 400µm could be healed by the plain capsule. The closure width was dramatically increased to 500µm and 800µm with the inclusion of MCC and SPA, respectively, mainly in 3 days. The expansion, water retention, and bridging properties of the APs enhanced the sealing performance of the capsules by providing nucleation sites and increasing the reaction rates of core materials to generate further calcium-based products inside the cracks. Therefore, higher recovery rates of mechanical strengths, along with a significant reduction in water ingress were achieved. The main healing products were identified as calcite crystals, C-S-H, calcium silicate, and aluminium-bearing phases.