Sewage sludge (SS) is a residual resulting from wastewater treatment that contains both organic and inorganic materials. Nowadays, SS management is a major issue owing to economic considerations and environmental pressure. It has been reported that the current sludge-to-landfill method would pose potential risks to human health and the environment. The incorporation of sustainable sludge valorization techniques (SVTs) into the SS treatment process could be a promising solution by transforming SS into value-added products, which mitigates the environmental impact of SS disposal. However, the selection of the most optimal process pathway from various SVTs is a challenging task. Hence, this paper proposes a mathematical optimization framework to determine the most sustainable SVT pathway using a single objective function of total annualized cost (TAC) minimization with the consideration of carbon pricing. A case study is conducted to evaluate the performance of the optimized SVT pathway compared to the conventional sludge management practice using different SS sources: (1) domestic sewage sludge and (2) a mixture of industrial sludge and domestic SS. The results reveal that the SVT pathway, which includes anaerobic digestion (AD) and followed by land application, is the most ideal route for domestic SS feed. For mixed SS feed, AD followed by landfilling is preferred due to the presence of hazardous constituents in mixed SS. Sensitivity analysis is performed to study the effect of SS quantity and carbon pricing on the SVT selection. It is expected that this study could provide critical insights into the development of a sustainable SS treatment process.