Development of efficient wastewater treatment technologies along with circular economic approaches are the most imperative biotechnological attention presently. Thus, to add more value in this process, current study accessed a novel oleaginous yeast strain, R. glutinis ISO A1 for its biodegrading potential in sewage wastewater encompassing toxic formulations. To achieve improved performance light irradiance of various intensities (50 lux–150 lux) was applied during the cultivation period as an abiotic stress factor. All irradiances significantly stimulated nutrient removal efficiency of R. glutinis and improved growth rate but intracellular accumulation of carotenoids was found slightly inhibited. Boosted lipogenesis (lipid content ⁓40.66%) along with phenomenal reduction in COD (88.33 ± 1.88%), nitrate (73.2 ± 3.95%) and phosphate (85.1 ± 2.97%) was monitored with an optimum exposure condition at 100 lux. Cultures illuminated with light (50 lux–150 lux) also showed excellent tolerance for multiple heavy metals (Zn, Cd, Cr) and exhibited their complete removal. Further, analysis of fatty acid methyl esters (FAME) presented an increase in saturated fatty acids that reveal modulations in R. glutinis's membrane fluidity against stress generated due to the light exposure. Besides, estimated biodiesel properties of obtained FAME complying European and American fuel standards. These findings shed new light on the factors affecting wastewater bioremediation and successfully established a photo-induced biological treatment system in an oleaginous yeast for the very first time with an addition to successive lipid enhancement.