Construction industry is a significant contributor to worldwide economic growth. It is also contributing greatly to global greenhouse gas emissions up to nearly 40%. Only the commonly used construction materials like cement, concrete, steel and asphalt are a major source of global carbon dioxide (CO2) emissions up to approximately 15%. This global problem has introduced the concept of green materials that are also known as sustainable materials and minimize environmental impacts throughout their life cycle by lowering embodied energy, greenhouse emissions and waste generation. Thar fly and bottom ashes (TFA and TBA) are produced as by-products due to coal combustion in the Thar coal-fired power plants (CFPPs) accounting for annual production of over 2 million tons. Among them, the TFA offers a promising solution for low-carbon and sustainable construction practices. This study explores the potential of the TFA as a green material in construction and also evaluates the environmental impact and economic benefits of the utilization of the TFA as partial replacements with different construction materials. The results show that the 10–30% TFA-replacements with cement in the concrete reduced CO2 emissions and embodied energies by up to 28% as well as decreased cost of the cement by up to 30%. Thus, the Thar fly ash can be utilized as a green and sustainable material in construction applications.