Hazardous waste materials pose a serious threat to the environment. Disposal of hazardous wastes by land filling or incineration can cause secondary pollution by contamination of major land and water resources. Textile sludge is considered as a hazardous waste because of the large amount of heavy metals present in it. Stabilization and solidification (S/S) of heavy metals is generally recommended for such waste before its disposal. The alkaline nature of many construction materials makes them a potential candidate of sludge utilization. In the present study, environment friendly magnesium-based stabilizer (low grade- MgO) is used for stabilization of textile sludge. The treated sludge was then used to make mortar specimens and evaluated for their mechanical, absorption and microstructural characteristics. The leachability of heavy metals from the stabilized sludge was analyzed by Inductive Coupled Plasma Atomic Emission Spectroscopy. Low grade MgO was found to be effective in stabilizing the heavy metals, which led to their precipitation and resulted in tremendous improvement in properties of mortar mixes. Stabilization with 10% and 15% MgO produced highest compressive strength and increased pH of mortar favorably for possible use in reinforced concrete. Up to 10% replacement of cement by stabilized textile sludge was found to be optimum without negatively affecting the properties of the mortar.SEM images revealed densification of microstructure on addition of stabilized textile sludge to the mix.