With the growing urbanization, the increasing number of vehicles has exacerbated the problem of traffic congestion, leading to various negative impacts such as long waiting times, wastage of fuel, and environmental pollution. The situation becomes more severe when emergency vehicles are present on the roads, as their ability to respond quickly may be delayed due to the existing traffic conditions. To address these challenges, we propose a decentralized scheduling algorithm that prioritizes emergency vehicles. The algorithm dynamically adjusts the green signal duration based on the congestion level and gives the topmost priority to that lane where emergency vehicles are present. When an emergency vehicle is detected on the road, the algorithm promptly switches on the corresponding green signal to facilitate its smooth passage on the road. To evaluate the efficiency of our proposed algorithm, we use a traffic simulator (SUMO) “Simulator of Urban Mobility” on a map of Rohini Sector-16, Delhi, India. In the simulation, we consider five junctions and compare the performance of our model with two other models: a fixed-time duration of 40 s and another with a fixed-time duration of 30 s. The comparative analysis leads to significant improvements in various key traffic parameters, including Average Waiting Time (AWT), Average Queue Length (AQL), and Average Speed (AS). The comparative results show that our algorithm yields a remarkable improvement in AWT by 93.14% and 22.40%, AQL by 0.794% and 0.846%, and AS by 86.57% and 60.77%, respectively.