Rising land surface temperature (LST), urban heat island (UHI) effects, and stress on surface-, processed-, potable-, and ground-water resources are some undesirable ecological changes due to rapid urbanization. Treating and reusing city-generated wastewater for maintaining urban green spaces (UGS) helps in reducing/preventing groundwater extraction, ensuring sufficient supply of potable water, and bringing down LST. However, the benefits of reusing treated wastewater in UGS for enhancing regulatory ecosystem services (RES) and ushering in a circular economy are yet to be realized. In view of these, the transportation costs of treated wastewater for irrigating the UGS of Panaji city—proposed to be developed as a smart city—were assessed. Field surveys were conducted at seven gardens/parks to collect the primary data on vegetation type (ground cover, hedge plants, and trees) and their daily water requirement. As the main focus of this study, a cost–benefit analysis of (a) drawing the groundwater using borewells versus use of treated wastewater from the city’s STP, and (b) two modes of treated wastewater transport: water tankers vs. pipeline was performed. Our analyses suggest that the copiously available 14 MLD treated wastewater from the STP, which meets all the safety standards, is far in excess of the current requirement of 6.24 MLD for watering the vegetation in all 17 parks/gardens in the city. Pipeline is an efficient (less energy, labor, and time) and economical (~47% more than water that is tanker-based) transportation mode. By utilizing the otherwise unused treated wastewater, which is processed at a cost of over USD half a million annually, the RES offered by the use of treated wastewater are (a) partially curtailing a combined loss of ~16 MLD due to the extraction of groundwater plus evapotranspiration (@8.86 mm d−1) from Panaji city’s 1.86 km2 UGS, and (b) reduction in LST ~3–4 °C in all of Panaji city. In addition, with the proficient and sustainable management of UGS and the meeting of many UNSDGs, the enhanced vegetation growth plus elevated carbon sequestration rates in the UGS are possible through the reuse of treated wastewater.