Water scarcity due to overuse and growing water pollution has led to the need for upgrading of conventional methods of wastewater treatment. The biological synthesis of zinc oxide nanoparticles (ZnO-NPs) and their photocatalytic capacity to degrade contaminants offer a promising and environment-friendly approach to municipal wastewater treatment. This technique is advantageous due to its cost-effectiveness, sustainability, and reduction in toxic residual substances. In this study, microbial-synthesized ZnO-NPs were used for the treatment of municipal wastewater. The objective of this study was to evaluate the potential of treated wastewater for wheat crop cultivation. Zinc oxide nanoparticles were synthesized from a pre-isolated bacterial strain, namely Shewanela sp., and characterized using UV–VIS, X-ray diffraction (XRD), scanning electron microscopy (SEM), and Fourier transform infrared spectroscopy (FTIR) analyses. The results showed that after the treatment of wastewater, the concentration of total dissolve solids (TDS), the chemical oxygen demand (COD), and sulfate and phosphate levels decreased by 76.5%, 57.1%, 81.1%, and 67.4%, respectively. However, the application of treated wastewater increased chlorophyll, carotenoids, and antioxidants by 45%, 40.8%, and 10.5 to 30.6%, respectively. Further, the application of treated wastewater also significantly decreased oxidative stress induced by hydrogen peroxide (H2O2) and malondialdehyde (MDA) by 8.1% and 30.1%, respectively. In conclusion, biosynthesized ZnO-NPs could be an important choice to treat municipal wastewater and to improve wheat productivity.