Development and application of novel technologies in food processing is vital for ensuring the availability of adequate, safe, and convenient food with the desired quality and functional properties. Environmental and economic sustainability of technologies is essential prior to their application in the food processing sector. The objective of this research is to determine the environmental and economic feasibility of ultrasound-assisted extraction (UAE) for recovering functional food ingredients from seaweed. Experimental data is used to conduct a life cycle assessment (LCA) to investigate the environmental performance with a functional unit (FU) of obtaining 1 g of extracted polyphenols, measured as gallic acid equivalents (mg GAE)/g seaweed. A life cycle impact assessment is performed with ReCiPe 2016 at midpoint. The cost of manufacturing (COM) of phenolic-rich extracts (as functional ingredient, bioactive, or nutraceutical) is estimated using time-driven activity-based costing (TDABC). The environmental profile findings show that across all categories, the UAE has considerably lower impacts than the conventional method, with electricity as the most important impact contributor, followed by solvent production. An economic assessment estimates the COM over a one-year period at a large scale using the UAE to be EUR 1,200,304, EUR 2,368,440, and EUR 4,623,290 for extraction vessel capacities of 0.05, 0.1, and 0.15 m3, respectively. Raw materials (including the type of raw material) and operational labour costs are the primary contributors to the COM. The findings thus present evidence to support the adoption of an environmentally and economically viable technology for functional ingredient production.