Background: Without sufficient alternatives to crude oil, as demand continues to rise, the global economy will undergo a drastic decline as oil prices explode. Dependence on crude oil and growing environmental impairment must eventually be overcome by creating a sustainable and profitable alternative based on renewable and accessible feedstock. One of the promising solutions for the current and near-future is the substitution of fossil fuels with sustainable liquid feedstock for biofuel production. Among the different renewable liquid feedstock's studied, wastewater is the least explored one for biodiesel production. Sago wastewater is the byproduct of the cassava processing industry and has starch content ranging from 4 to 7%. The present investigation was aimed to produce microbial lipids from oleaginous yeast, Candida tropicalis ASY2 for use as biodiesel feedstock and simultaneously decontaminate the sago processing wastewater for reuse. Initial screening of oleaginous yeast to find an efficient amylolytic with maximum lipid productivity resulted in a potent oleaginous yeast strain, C. tropicalis ASY2, that utilizes SWW as a substrate. Shake flask experiments are conducted over a fermentation time of 240 h to determine a suitable fatty acid composition using GC-FID for biodiesel production with simultaneous removal of SWW pollutants using ASY2. Results: The maximum biomass of 0.021 g L −1 h −1 and lipid productivity of 0.010 g L −1 h −1 was recorded in SWW with lipid content of 49%. The yeast strain degraded cyanide in SWW (79%) and also removed chemical oxygen demand (COD), biological oxygen demand (BOD), nitrate (NO 3), ammoniacal (NH 4), and phosphate (PO 4) ions (84%, 92%, 100%, 98%, and 85%, respectively). GC-FID analysis of fatty acid methyl esters (FAME) revealed high oleic acid content (41.33%), which is one of the primary fatty acids for biodiesel production. Conclusions: It is evident that the present study provides an innovative and ecologically sustainable technology that generates valuable fuel, biodiesel using SWW as a substrate and decontaminates for reuse.