Cement production is a major source of carbon dioxide pollution. An environmentally friendly concrete needs to be developed in order to overcome the adverse environmental impacts of cement production and the continuing depletion of natural resources. Paper waste (hypo sludge) from the paper industry is becoming a challenge due to its extensive area requirements for disposal and continually increasing adverse environmental effects. To reduce paper waste and pollution, it might be beneficial to use it as hypo sludge in concrete mixes. In the present investigation, hypo sludge was used as a partial replacement in varied proportions (5, 10, 15, 20, 25, and 30%) of cement in concrete of M30 grade to be assessed. Styrene–butadiene rubber (SBR) latex and basalt fibre (BF) were added to hypo sludge concrete to improve its durability and post-cracking behaviour. From the test results, the optimum dosage of hypo sludge, basalt fibre, and SBR latex was found to be 15%, 0.3%, and 10%, respectively. From the mechanical properties testing compared with the control concrete, latex-added hypo sludge basalt fibre showed an increase in compressive strength by 17.08%, flexural strength by 14.55% and tensile strength by 14.29%. Microstructural results showed that SBR latex created greater consistency in the interaction of the concrete stages. Results of the tests indicate that the performance of the concrete in terms of its strength was improved by partially replacing the cement in the concrete with hypo sludge.