The synthesis and developments of magnetic chitosan nanoparticles for high efficiency removal of the cadmium ions from aquatic medium are one of the most challenging techniques. Highly adsorptive composite (MCH-ATA) was produced by the reaction of chitosan with formaldehyde and amino thiazole derivative. The sorbent was characterized by FTIR, elemental analyses (EA), SEM-EDX, TEM analysis, TGA and titration (volumetric). The modified material includes high nitrogen and sulfur contents (i.e., 4.64 and 1.35 mmol g−1, respectively), compared to the pristine material (3.5 and 0 mmol g−1, respectively). The sorption was investigated for the removal of Cd(II) ions from synthetic (prepared) solution before being tested towards naturally contaminated groundwater in an industrial area. The functionalized sorbent shows a high loading capacity (1.78 mmol Cd g−1; 200 mg Cd g−1) compared to the pristine material (0.61 mmol Cdg−1; 68.57 mg Cd g−1), while removal of about 98% of Cd with capacity (6.4 mg Cdg−1) from polymetallic contaminated groundwater. The sorbent displays fast sorption kinetics compared to the non-modified composite (MCH); 30 min is sufficient for complete sorption for MCH-ATA, while 60–90 min for the MCH. PFORE fits sorption kinetics for both sorbents, whereas the Langmuir equation fits for MCH and Langmuir and Sips for MCH-ATA for sorption isotherms. The TEM analysis confirms the nano scale size, which limits the diffusion to intraparticle sorption properties. The 0.2 M HCl solution is a successful desorbing agent for the metal ions. The sorbent was applied for the removal of cadmium ions from the contaminated underground water and appears to be a promising process for metal decontamination and water treatment.