Spent mushroom substrate (SMS)-derived bio-based polyurethane coatings typically exhibit poor hydrophobicity and short nutrient release durations, limiting their ability to satisfy long-term crop requirements. This study developed improved controlled-release urea by preparing water-repellent and compact bio-polymer coatings from recyclable SMS using non-toxic siloxane and nano-SiO₂ modifiers through simple processes. The dual modification markedly reduced water absorption (from 6.60% to 4.43%) and porosity (from 6.32% to 3.92%), creating a dense coating with lotus-leaf-like nanoscale surface protrusions and fewer intermembrane pores. As a result, the nitrogen (N) release period of the dual-modified bio-polymer-polyurethane-coated urea (SBPCU) with a 7% coating thickness was extended from 23 days to 42 days. Phytotoxicity assessments confirmed the excellent biosafety of the bio-polymer coating, revealing no adverse effects on maize growth and even promotional effects at low concentrations. This approach offers a sustainable, eco-friendly, and scalable strategy for producing bio-polymer-coated urea from agricultural waste, serving as a viable alternative to petrochemical coatings while improving nutrient use efficiency and biosafety.