The utilization of waste-paper-biomass for extraction of important α-cellulose biopolymer, and modification of extracted α-cellulose for application in enzyme immobilization can be extremely vital for green circular bio-economy. Thus, in this study, α-cellulose fibers were super-magnetized (Fe3O4), grafted with chitosan (CTNs), and thiol (-SH) modified for laccase immobilization. The developed material was characterized by high-resolution transmission electron microscopy (HR-TEM), HR-TEM energy dispersive X-ray spectroscopy (HR-TEM-EDS), X-ray diffraction (XRD), vibrating sample magnetometer (VSM), X-ray photoelectron spectroscopy (XPS), and Fourier transform infrared spectroscopy (FT-IR) analyses. Laccase immobilized on α-Cellulose-Fe3O4-CTNs (α-Cellulose-Fe3O4-CTNs-Laccase) gave significant activity recovery (99.16%) and laccase loading potential (169.36 mg/g). The α-Cellulose-Fe3O4-CTNs-Laccase displayed excellent stabilities for temperature, pH, and storage time. The α-Cellulose-Fe3O4-CTNs-Laccase applied in repeated cycles shown remarkable consistency of activity retention for 10 cycles. After the 10th cycle, α-Cellulose-Fe3O4-CTNs possessed 80.65% relative activity. Furthermore, α-Cellulose-Fe3O4-CTNs-Laccase shown excellent degradation of pharmaceutical contaminant sulfamethoxazole (SMX). The SMX degradation by α-Cellulose-Fe3O4-CTNs-Laccase was found optimum at incubation time (20 h), pH (3), temperatures (30 °C), and shaking conditions (200 rpm). Finally, α-Cellulose-Fe3O4-CTNs-Laccase gave repeated degradation of SMX. Thus, this study presents a novel, waste-derived, highly capable, and super-magnetic nanocomposite for enzyme immobilization applications.