Sustainable valorization of tannery sludge (TS) is vital for achieving several sustainable development goals (SDGs) in the tannery industry. TS is considered a hazardous waste by-product posing a significant environmental challenge. However, TS can be utilized for energy or resource recovery by considering it as biomass and implementing the circular economy (CE) concept. Therefore, this study aims to develop an innovative DPSIR (Driver, Pressure, State, Impact, and Response) framework for promoting sustainable valorization of TS. Further, the study extends to quantify the importance of subjective DPSIR factors by offering interval-valued intuitionistic fuzzy number-based best worst method (IVIFN-BWM), which is relatively new in the literature and able to deal with the uncertainty, inconsistency, imprecise, and vagueness in the decision-making process. The study also investigates the most appropriate TS valorization technologies concerning identified DPSIR factors using a novel IVIFN-combined compromise solution (CoCoSo) approach. This research contributes to the literature by developing a comprehensive solution approach that combines the DPSIR framework, IVIFN-BWM, and IVIFN-CoCoSo method in addressing sustainability and resource recovery challenges for the tannery industry. The research findings highlight the potential of sustainable valorization of TS in reducing the waste amount and promoting sustainability and CE practices in the tannery industry. The findings indicated that response factors ‘creation of national-level policies and awareness campaign’ and ‘facilitating financial support to adopt waste valorization technologies’ received the highest priority among other DPSIR factors for managing and fostering sustainable valorization of TS. The IVIFN-CoCoSo analysis confirmed that the most promising TS valorization technology is ‘gasification’, which is followed by pyrolysis, anaerobic digestion, and incineration. The study's implications extend to policymakers, industrial practitioners, and researchers, who can leverage the research findings to develop more sustainable TS management practices in the tannery industry.