Abstract The fast expansion of aquaculture to fulfil rising worldwide seafood demand poses considerable environmental concerns, particularly in the appropriate management of nutrient-rich wastewater. Traditional wastewater treatment methodologies often prove insufficient for addressing the high concentrations of organic matter and dissolved nutrients like nitrogen and phosphorus, characteristic of aquaculture discharge. This inadequacy underscores the urgent need for advanced and innovative approaches to mitigate the ecological impacts of aquaculture operations, including eutrophication and degradation of aquatic ecosystems. Recently, “algal-based hollow fibre membrane bioreactors” (A-HFMBRs) have surfaced as a viable solution for green and effective wastewater treatment. These bioreactors effectively remove organic and inorganic matter, reduce the risk of eutrophication, and generate valuable by-products. They also offer advantages such as low energy consumption, high algal biomass yield, and efficient water reclamation. This review critically evaluates advanced methodologies for aquaculture wastewater treatment, with a particular focus on membrane bioreactor (MBR) systems and A-HFMBR. It discusses the novel approaches for fouling prevention in MBR systems. The review delves into the critical factors impacting the efficiency of A-HFMBR systems, including hydraulic retention time, nutrient removal, etc. It also evaluates the environmental and cost-effective feasibility of these technologies to assess their suitability for large-scale deployment and highlights their significant challenges. By identifying key challenges and proposing future research directions, this study aims to advance the development of A-HFMBRs as a sustainable solution for aquaculture wastewater treatment.