Intensive farming in urban suburbs often causes habitat loss, soil erosion, wastewater discharge, and agricultural productivity decline, threatening long-term benefits for the local community. We developed a nature-based solution for sustainable land restoration by establishing “Green Treasure Island” (GTI). The aim of this study is to evaluate the ecological restoration effectiveness of GTI and explore its feasibility and replicability for future applications. The core eco-functional zone of GTI—a 7 hm² forested wetland—embedded a closed-loop framework that integrates land consolidation, ecological restoration, and sustainable land utilization. The forested wetland efficiently removed 65% and 74% of dissolved inorganic nitrogen and phosphorus from agricultural runoff, raised flood control capacity by 22%, and attracted 48 bird species. Additionally, this biophilic recreational space attracted over 3400 visitors in 2022, created green jobs, and promoted local green agricultural product sales. Through adaptive management and nature education activities, GTI evolved into a landmark that represents local natural–social characteristics and serves as a publicly accessible natural park for both rural and urban residents. This study demonstrates the feasibility of creating GTI for improving ecosystem services, providing a practical, low-cost template that governments and local managers can replicate in metropolitan rural areas worldwide to meet both ecological and development goals.