To overcome the scarcity of river sand and dumping of construction and demolition wastes, the fine recycled aggregate (FRA) collected from C&D wastes is being utilized as a replacement to river sand. Many earlier studies reported that the higher water absorption of fine recycled aggregate and weak interfacial transition zone (ITZ) resulted in the development of the concrete with less strength and durability requirements. This study surmounts the above two factors through pre-saturation and a two-stage mixing approach (TSMA) technique. The concrete mixes prepared at 0.45 w/c ratios with 0%, 25%, 50%, and 100% of FRA were evaluated through hardened properties such as compressive strength, split tensile strength, flexural strength, and durability properties such as water absorption, sorptivity, shrinkage, rapid chloride penetration, and carbonation tests. The results indicate that the optimum level of replacement of fine recycled aggregate was 25% and the increase of fine recycled aggregate decreases the strength and durability properties. However, increased curing of concrete resulted in better strength and durability properties. The strength of the concrete was increased by 12% at 28 days and 17.46% at 90 days by two-stage mixing approach. The water absorption, porosity, shrinkage, chloride penetration, and carbonation of two-stage mixing approach was decreased by 7.45%, 15.38%, 16.57%, 18.18%, and 13.51% compared to normal mixing approach. Microstructural investigations show improvement in the interfacial transition zone with two-stage mixing approach compared to normal mixing approach.