This study critically reviews lithium slag (LS) as a supplementary cementitious material (SCM), thereby examining its physiochemical characteristics, mechanical properties, and durability within cementitious and geopolymer composites. The review reveals that LS’s particle size distribution is comparable to fly ash (FA) and ground granulated blast furnace slag (GGBS), which suggests it can enhance densification and nucleation in concrete. The mechanical treatment of LS promotes early hydration by increasing the solubility of aluminum, lithium, and silicon. LS’s compositional similarity to FA endows it with low-calcium, high-reactivity properties that are suitable for cementitious and geopolymeric applications. Increasing the LS content reduces setting times and flowability while initially enhancing mechanical properties, albeit with diminishing returns beyond a 30% threshold. LS significantly improves chloride ion resistance and impacts drying shrinkage variably. This study categorizes LS’s role in concrete as a filler, pozzolan, and nucleation agent, thereby contributing to the material’s overall reduced porosity and increased durability. Economically, LS’s cost is substantially lower than FA’s; meanwhile, its environmental footprint is comparable to GGBS, thereby making it a sustainable and cost-effective alternative. Notwithstanding, there is a necessity for further research on LS’s fine-tuning through grinding, its tensile properties, its performance under environmental duress, and its pozzolanic reactivity to maximize its utility in concrete technologies. This study comprehensively discusses the current strengths and weaknesses of LS in the field of building materials, thereby offering fresh perspectives and methodologies to enhance its performance, improve its application efficiency, and broaden its scope. These efforts are driving the sustainable and green development of LS in waste utilization and advanced concrete technology.