Arable soils irrigated with wastewater (SIWs) cause ecological and human health issues due to the presence of heavy metals (HMs). Burning rice stubble (RS) poses severe environmental and human health hazards. Converting RS into rice stubble compost (RSC) and rice stubble biochar (RSB) can overcome these issues. Here, we considered the role of RS, RSC, and RSB as individual soil amendments and combined each of them with arbuscular mycorrhiza fungi (AMF) to observe their effectiveness for HM immobilization in SIW, their uptake in pea plants, and improvements in the physicochemical properties of soil. The results revealed that adding RSB and AMF reduced the bioavailable concentrations of Pb, Cd, Ni, Cu, Co, and Zn in SIW by 35%, 50%, 43%, 43%, 52%, and 22%, respectively. Moreover, RSB+AMF treatment also reduced Pb, Cd, Ni, Cu, Co, and Zn concentrations in grain by 93%, 76%, 83%, 72%, 71%, and 57%, respectively, compared to the control. Improvements in shoot dry weight (DW) (66%), root DW (48%), and grain yield (56%) per pot were also the highest with RSB+AMF. RSB+AMF treatment enhanced soil health and other soil attributes by improving the activity of urease, catalase, peroxidase, phosphatase, β-glucosidase, and fluorescein diacetate by 78%, 156%, 62%, 123%, 235%, and 96%, respectively. Interestingly, RSB+AMF also led to the strongest AMF–plant symbiosis, as assessed by improved AMF root colonization (162%), mycorrhizal intensity (100%), mycorrhizal frequency (104%), and arbuscular abundance (143%). To conclude, converting RS into RSB can control air pollution caused by RS burning. Moreover, adding RSB with AMF to SIW can reduce HM uptake in plants, improve soil health, and thus minimize ecological and human health issues.