The deterioration of dams and levees is an increasing concern for both infrastructure integrity and environmental sustainability. The extensive repercussions, including the displacement of communities, underscore the imperative for sustainable interventions. This study addresses these challenges by investigating the stabilization of dredged material (DM) for diverse applications. Seven mixtures incorporating fly ash, lime, and cement were formulated. The Standard Compaction Test was used to determine optimal density–moisture conditions, which helped with brick fabrication. Bricks were tested for compressive strength over various curing periods, and the durability of the 28-day-cured samples was evaluated by performing water immersion tests following the New Mexico Code specifications. Scanning electron microscopy (SEM) was used to assess microstructural bonding. Results confirm that the inclusion of cementitious stabilizers modifies the material’s microstructure, resulting in enhancements of both strength and water resistance. Notably, the stabilized material demonstrates potential for use in non-fired brick manufacturing and as bridge stones for waterway erosion control. This dual-function application offers a sustainable and economically feasible approach to managing dredged materials.