In today’s era of rapid infrastructure development, ensuring the durability and environmental sustainability of soil subgrades in road construction remains a critical concern. With recent advancements in non-traditional soil stabilizing binders, including environmentally friendly industrial waste materials such as fly ash and slag, there is growing recognition of the potential for limestone powder (LSP), a low-carbon alternative soil stabilizing material, to replace traditional calcium-based additives like ordinary Portland cement (OPC) and lime. However, the full extent of LSP’s efficacy in soil treatment has yet to be fully explored. Therefore, this paper investigates the partial substitution of cement with LSP for stabilizing sulfate-bearing saline sandy soil and assesses its impact on the treated soil samples’ mechanical properties and durability parameters. For this purpose, five stabilized mixes, including a control mix (no stabilizer), were designed, wherein LSP partially replaced 8% of the OPC at 25%, 50%, and 75% substitution levels. A series of laboratory tests were conducted to track the changes in the geochemical properties and the mineralogical compositions and evaluate the stabilized soil samples’ improved mechanical performance and durability parameters. The experimental results show that adding LSP to the cement-treated sulfate-bearing saline soil improved the soil’s mechanical properties and enhanced the soil’s durability parameters. Specifically, it decreased the soil plasticity, improved the soil strength parameters, enhanced the soil stability, and reduced the volumetric swelling and soil moisture susceptibility. In addition to its technical advantages, using LSP, an industrial byproduct, in soil stabilization offers environmental and economic benefits, highlighting its potential as a sustainable solution in engineering practices.