Appropriate wastewater technologies and sound management are crucial to global water quality and conservation. The integrated algal pond system (IAPS), considered an efficient, passive and low‐cost wastewater treatment technology for peri‐urban spaces, is perceived to yield a final effluent unsuitable for discharge. Experiments were carried out to challenge the prevailing perception that algal‐based wastewater treatment processes and in particular IAPS produce an effluent that does not always meet national and/or regional regulatory standards. Formation of a microalgal–bacterial floc (MaB‐flocs) and settleability together with biomass removal from algal settling ponds (ASPs) is shown to reduce total suspended solids (TSS) from >50 to <20 mg L−1. Thus, production of a readily settleable MaB‐floc coupled with removal of settled biomass from ASP ensures that final effluent TSS remains below the general limit of 25 mg L−1 and yields an effluent suitable for either irrigation or discharge.