Large amounts of carbonated mud waste (CMW) require disposal during sugar manufacturing after the carbonation process. The lightweight of CMW enables its utilization as a partial replacement for the cement to reduce costs and CO2 emissions. Here, various levels of CMW, namely, 0, 5, 10, 15, 20, and 25 wt.% were applied to produce composite cement samples with ordinary Portland cement (OPC) as a regular mix design series. Pure calcium oxide (CaO) nanoparticles were obtained after the calcination of CMW. The techniques of X-ray fluorescence spectrometers (XRF), Transmission electron microscope (TEM), Selected area diffraction (SAED), Scanning electron microscope (SEM), energy dixpersive X-ray (EDX), and dynamic light scattering (DLS) were used to characterize the obtained CaO nanoparticles. According to the compressive strength and bulk density results, 15 wt.% CMW was optimal for the mix design. The specific surface area increased from 27.8 to 134.8 m2/g when the CMW was calcined to 600 °C. The compressive strength of the sample containing 15% CMW was lower than the values of the other pastes containing 5% and 10% CMW at all of the curing times. The porosity factor of the hardened cement pastes released with a curing time of up to 28 days. Excessive CMW of up to 25 wt.% reduced the properties of OPC.