ABSTRACT The article presents an innovative technique for the production of autoclaved-aerated concrete using desulfurization wastewater. The experiments were conducted to explore the optimal formula that meets the requirements of high compressive strength(≥5MPa) and low oven-dry density (≤600 kg m−3). Combined with specific production cases, the environmental assessment within the scope of the total life cycle assessment and circular economy assessment were carried out. Using compressive strength and maximum dry density as indicators, the optimal formulation was found to be 73%:16%:11%:30%:45% for fly ash: cement: lime: desulfurization wastewater: recycled water (process water). And the optimum ratio was 72%: 14%: 12%: 45%: 30% for fly ash: cement: lime: nanofiltration water: recycled water. The life cycle assessment contains a total life-cycle inventory and willing to pay was 61.1CNY. In addition, the GWP = 144.83 kg per cubic meter of autoclaved aerated concrete, the carbon emission reduction efficiency is 72.4%, the water saving is 0.195CNY for one ton of water, and the water saving rate is 40%. The technology is also a low-cost solution for clean production and circular economy model, promoting green and low-carbon development and meeting the requirements of “waste-free cities” popular worldwide.