Wastewater generated on a global scale has become a significant source of water resources which necessitates appropriate management strategies. However, the complexities associated with wastewater are lack of economically viable treatment systems, especially in low- and middle-income countries. While many types of treatment systems are needed to serve the various local issues, we propose natural treatment systems (NTS) such as natural wetlands that are eco-friendly, cost-effective, and can be jointly driven by public bodies and communities. In order for it to be part of wastewater management, this study explores the NTS potential for removal of pollutants, cost-effectiveness, and reuse options for the 1.20 million m3/day of wastewater generated in Hyderabad, India. The pilot study includes hydro-geophysical characterization of natural wetland to determine pollutant removal efficiency and its effective utilization for treated wastewater in the peri-urban habitat. The results show the removal of organic content (76–78%), nutrients (77–97%), and microbes (99.5–99.9%) from the wetland-treated wastewater and its suitability for agriculture applications. Furthermore, the wetland efficiency integrated with engineered interventions led to the development of NTS models with different application scenarios: (i) constructed wetlands, (ii) minimized community wetlands, and (iii) single outlet system, suitable for urban, peri-urban and rural areas, respectively.