This study was conducted to examine the dry synthesis and application of novel nano‐size calcium/iron‐based composite material as a separation/immobilization treatment of heavy metals (As, Cd, Cr, and Pb) in fly ash from municipal solid waste incinerator. After grinding with nano‐Fe/Ca/CaO and with nano‐Fe/Ca/CaO/[PO4], approximately 30 wt % and 25 wt % of magnetic fraction fly ash were separated. The highest amount of entrapped heavy metals was found in the lighter, magnetically‐separated fly ash fraction (i.e. 91% heavy metals in 25% treated fly ash). Immobilization rate of heavy metals in the magnetic or non‐magnetic fly ash fractions were about 98% and 100%, respectively. SEM‐EDS observations indicate that the main fraction of enclosed/bound materials on treated fly ash includes Ca/PO4‐associated crystalline complexes. After nano‐Fe/Ca/CaO/[PO4] treatment, the heavy metal concentrations in the fly ash leachate were much lower than the Japan standard regulatory limit for hazardous waste landfills. The addition of a nano‐Fe/Ca/CaO/PO4 mixture with simple grinding technique is potentially applicable for the remediation and volume reduction of fly ash contaminated by heavy metals. © 2016 American Institute of Chemical Engineers Environ Prog, 35: 1693–1698, 2016