An iron‐salt catalyzed, atom economic, unfamiliar type of alkyne carbonyl metathesis strategy has been developed by using isatins and acetylenes for the regioselective synthesis of (E)‐3‐(2‐oxo‐2‐arylethylidene)indolin‐2‐one derivatives, which has been further utilized to develop a catalyst‐free methodology for the synthesis of biologically active spiro‐oxindolopyrrolizidine scaffolds in a highly regio‐ and stereospecific manner by reacting with l‐proline and aldehydes. Both methods are acceptable towards various functionalities that include electron‐donating and electron‐accepting groups at the ortho‐, meta‐ and para‐positions. This protocol provides an environmentally friendly reaction methodology for the synthesis of a series of (1′S,2′R,3′R,7a′R)‐1′,3′,5′,6′,7′,7a′‐hexahydrospiro[indoline‐3,2′‐pyrrolizin]‐2‐ones.