Phosphorus pollution in sediment-derived waters poses a critical environmental challenge, driving eutrophication in freshwater and coastal ecosystems. Conventional physicochemical removal methods are costly and generate secondary pollutants. This study investigates the biological utilization of phosphorus from sediment-laden waters using three green microalgal species—Chlorella vulgaris, Scenedesmus quadricauda, and Desmodesmus communis—and their mixed-culture consortium under controlled photobioreactor conditions. Batch experiments were conducted over 14 days at 25 ± 1°C with varying light intensities (50–200 µmol photons m⁻²s⁻¹) and initial pH levels (6.5–8.5). Water samples were characterized for total phosphorus (TP), orthophosphate (PO₄³⁻-P), total nitrogen (TN), chemical oxygen demand (COD), and biomass productivity. The mixed culture (C. vulgaris: S. quadricauda = 1:1) achieved the highest TP removal efficiency of 92.8 ± 1.5% and PO₄³⁻-P removal of 95.3 ± 1.2% at pH 8.0 and 200 µmol m⁻²s⁻¹ illumination, with a maximum biomass productivity of 2.01 ± 0.09 g L⁻¹. Phosphorus removal occurred through a combination of assimilatory uptake and luxury polyphosphate accumulation. Kinetic analysis revealed first-order removal rate constants of 0.18–0.22 d⁻¹. The results demonstrate that microalgae-based biotreatment is a sustainable and efficient alternative for remediating phosphorus-contaminated sediment waters, with potential for biomass valorization.