India is in need of rapid construction technology with sustainability and environmentally friendly aspects. Prefabrication is a well-known technique that lowers carbon emissions and reduces environmental impacts. Life cycle assessment (LCA) evaluates these impacts of developed product/process. A new-age construction product was designed from a locally available agro-industrial waste called co-fired ash (CFA). Expanded polystyrene beads, fly ash, and crushed sand were also used in designing lightweight (LW) sustainable prefabricated panels. The effect of incorporating sustainable alternates into the mix designs is to be studied. An experimental small-scale model house was erected and LCA for the same was carried out with cradle-to-site approach. Based on the inventory, the environmental impact was assessed for four different indicators: acidification potential (AP), eutrophication potential (EP), global warming potential (GWP), and ozone depletion potential (ODP) were evaluated. Carbon emissions of the respective CFA-based concrete and LW prefabricated mix were found to be 0.162 kgCO2e/kg and 0.268 kgCO2e/kg, respectively. The impact of energy required during production, transport, and indirect emissions were found to contribute 3%, 3%, and 94%, respectively, to the proposed prefabricated system. Comprehensively, the phase involving mixing of LW mix contributed majorly towards all the impact indicators followed by mould preparation and material transport. The presented data helps the academia to quantify and recognise the possibilities to enhance their products’ performance.