This study investigates the application of lightweight foamed concrete (FC) in modular building floor systems to address challenges in lifting and transportation within modular construction. Initially, a literature review identifies FC’s characteristics and optimum mix design, considering its sustainability and strength. The comprehensive review highlights that FC can be a lightweight alternative to replace traditional concrete in floor structures. Further, this study conducted the life cycle assessment and indicates that FC with coarse fly ash substitution is the optimum mix, which releases less greenhouse gas emission (i.e., 740.89 kg CO2-eq/1 m3) than other mixes. Subsequently, the study conducted design verification and parametric study of composite floor systems (i.e., cold-formed steel-FC, timber-FC, and steel deck-FC). The results show similar flexural and shear performance compared to normal-weight concrete despite its lower density (1600 kg/m3) compared to normal-weight concrete (2400 kg/m3). Further, the reduction of modulus of elasticity (43% of normal-weight concrete’s value) in FC increases deflection by 22–46% and 11–15% for steel-FC and timber-FC floor systems, respectively. Overall, the outcome shows that FC can be an efficient alternative for mid-to-high-rise modular building floor construction. Its lightweight nature can reduce the module’s weight, making modular construction more cost-effective.