Wastewater remediation has become a major environmental concern in recent years, which has led scientists to look for innovative sustainable solutions. Diatoms have emerged as a potentially effective solution for wastewater treatment, primarily because of their extraordinary ability to absorb nutrients and engage in metabolic processes. The present study aims to accomplish two goals, firstly, green synthesis of silver nanoparticles (AgNPs) utilizing marine diatoms Chaetoceros sp. and Thalassiosira sp. Secondly, encapsulation of diatoms within a Ca-alginate hydrogel bead developed via the gelation method thus introducing a novel way to assess their effectiveness in nutrient bioremediation from wastewater. The study reveals that Thalassiosira sp. mediated AgNPs are very effective in removing phosphate and nitrate, with 74% and 65% removal rates respectively. Conversely, Chaetoceros sp. mediated AgNPs significantly decreased chemical oxygen demand (COD) by 73%. Furthermore, Thalassiosira sp. encapsulated in Ca-alginate hydrogel beads demonstrated significant removal rates: 64% for nitrate, 91% for phosphate, and 78% for COD, respectively. Furthermore, the biochemical profiles of both diatom-entrapped alginate beads were remarkable, and the approach shows potential for effective and sustainable wastewater treatment methods, which can further be investigated for long-term performance, scalability, and environmental impact on sustainability.