This paper introduces an innovative response to the pressing challenge of rapid and effective incident detection and management in urban settings. The proposed solution is a decentralized incident reporting system (IRS) harnessing blockchain technology and decentralized data storage systems. By empowering residents to report incidents, the proposed IRS enables seamless real-time monitoring and intervention by relevant departments. Built on a blockchain foundation, the proposed solution ensures immutability, transparency, security, and auditability, enhancing data resilience and comprehensive applicability. The proposed system leverages the InterPlanetary File System (IPFS) for the storage of incident proofs to manage the blockchain size effectively. Through the proposed IRS, transparency is upheld, enabling complete auditability of incident details and required interventions by citizens, societal bodies, and governmental bodies. Moreover, an incentive model is introduced to encourage active participation in incident reporting, thereby enhancing the system’s overall effectiveness and long-term sustainability. The proposed IRS integrates mobile technology to facilitate user engagement and data submission, essential for urban emergency management. Empirical validation using the Quorum–Raft blockchain demonstrates the feasibility of the proposed approach in terms of system throughput, incident reporting delay, blockchain size, and deployment cost. Specifically, the system maintains a latency of under 15 s even at high transaction rates, can handle up to 200 incidents per second, and is cost-effective, with deployment estimates for 16 organizations over five years being under 1.99 million USD. The method involves extensive testing with simulated incidents and user interactions to ensure robustness and scalability, showcasing the system’s potential for effective emergency management in urban environments.