This chapter explores one of the most pressing issues in agricultural water management in the present era: “the sustainable and effective reuse of wastewater.” Rapid population growth and climate change have immense pressure on freshwater resources used for sustainable agriculture, which encourage us to reuse the wastewater. Furthermore, wastewater treatment is a practical way to address the water shortage in agriculture; however, it could cause potential health risks and environmental pollution. This pressure urges the researcher to explore novel solutions to meet the rising water demands in agriculture other than relying only on conventional freshwater sources. The risks and advantages of functional practices of wastewater reuse in agriculture are thoroughly reviewed in this chapter. It also examines the possible effects of wastewater on soil health, crop productivity, and environmental sustainability. It examines the different levels of wastewater treatment required for diverse agricultural needs. Additionally, it addresses the challenges linked to the implementation of policies and the adoption of new technologies associated with wastewater reuse. This chapter highlights the innovations which prioritize the development of technologies for wastewater treatment. Digitalization, precision farming, and artificial intelligence improve efficiency, reduce risks, and maximize resource use in agriculture from wastewater management. Using wastewater reuse in agriculture has economic and environmental benefits as well. Moreover, wastewater reuse systems can reduce greenhouse gas emissions and save energy. The significance of raising awareness and gaining stakeholder support is also emphasized to ensure that wastewater reuse practices are successfully adopted and put into practice.