The Selective detection of hexavalent chromium Cr(VI), a highly toxic and carcinogenic form of chromium, at nanomolar concentration is critical due to its widespread industrial use and severe environmental and health impacts. This study presents the synthesis and application of carbon dots (CDs) derived from banana peel biowaste as a fluorescent nanosensor for the ultrasensitive and selective detection of Cr(VI). The CDs were synthesized through hydrothermal carbonization, yielding an average size of 1.9 nm, a quantum yield of 5%, and maximum fluorescence emission at 440 nm. The CDs displayed strong fluorescence quenching in Cr(VI), with minimal interference from other metal ions, highlighting their higher selectivity. CDs detection limit for Cr(VI) was determined as 52 nM or 2.7 ppb, significantly lower than those reported in recent studies, demonstrating the superior sensitivity. The quenching mechanism was further explored using X‐ray photoelectron spectroscopy (XPS), indicating that Cr(VI) undergoes reduction to Cr(III) upon interaction with the nitrogen‐containing surface functional groups of the CDs, suggesting a chemisorption process. This approach aligns with circular economy principles and supports achieving sustainable development goals (SDGs). Utilizing biowaste for synthesizing nanomaterials offers a promising pathway for creating environment friendly and cost‐effective sensors for detecting toxic metals.