This study investigates the possibility of using municipal solid waste incineration fly ash as a supplementary cementitious material to replace part of the clinker in cement. Life cycle assessment has shown that the partial replacement of clinker with blast furnace slag (CEM III) reduces cement’s global warming potential by ~30%, while replacing clinker with fly ash reduces it by up to 55%. When using CEM III as the control binder in cement in which 55 wt% of the clinker was replaced with hydrothermally treated fly ash, the flexural strength decreased by ~60% and the compressive strength by ~65%. When the fly ash was mixed with calcined and vitrified demolition materials, flexural strength decreased by ~30% and compressive strength by ~50%. The hardening of the hydraulic binders fixed the heavy metals in the municipal solid waste incineration fly ash.