Increasing the economic and environmental sustainability of irrigated agriculture is a vital challenge for the Mediterranean crop production sector. This study explores the effects of the adoption of reclaimed water (RW) as source of irrigation in conjunction with the application of deficit irrigation strategies in an olive orchard (different genotypes) located within the “Valle dei Margi” farmhouse (Eastern Sicily). Specifically, the RW was obtained in situ by treating the wastewater coming from the farmhouse throughout a nature-based treatment wetland system (TW). The effects of RW on crop water status (CWS) was assessed by conducting plant-based measurements (i.e., leaf water potential, Ψ; and leaves’ relative water content, RWC) and determining satellite-based biophysical indicators. An economic and environmental evaluation of the proposed sustainable irrigation practices was carried out using the life cycle assessment (LCA) approach. The RW quality showed high variability due to fluctuations in the number of customers at the farmhouse during the COVID-19 pandemic period. A strong impact on the variation in Ψ was observed among the olive orchard under the different water regimes, evidencing how CWS performances are conditioned by the genotype. However, no differences in leaves’ RWC and in satellite-based biophysical indicators were detected. Finally, the results of the LCA analysis underlined how the use of RW may permit us to obtain important economic and environmental gains, representing an added value for olive growing for operating in accordance to more sustainable development models.