Developing novel composite cement with processed ladle furnace slag (LFS) is one of the emerging research areas promoting circular economy in construction. In the present study, LFS was mechanically processed through milling at different intervals (10, 20, and 30 min). The mechanically processed LFS were studied for particle size distribution (PSD), mineralogical changes (XRD patterns), and functional group availability (FTIR patterns). The PSD studies showed 30 min. of grinding time as the optimal. The XRD studies revealed changes in the peak intensities of the available minerals in the processed LFS compared to unprocessed. XRD patterns of processed LFS samples were found amorphous, with different crystalline phases unavailable. The FTIR patterns of unprocessed and processed LFS showed the existence of different functional groups, i.e., Si & horbar; O & horbar; Si, O & horbar; H, and O & horbar; C & horbar; O bonds. Further, processed LFS is activated using sodium meta-silicate pentahydrate (Na2SiO3<middle dot>5H2O) solution to modify the hydration reaction of the composite cement to achieve the desirable properties. The comparative studies of three binders' namely processed LFS-based, unprocessed LFS-based and ordinary portland cement (OPC), were carried out regarding reactivity index, hydration, strength, hydrate assemblage and thermograms. The mechano-chemically processed LFS-based composite cement showed a higher compressive strength of 12.6% and 9.0% compared to OPC at a replacement level of 10% and 30%, respectively. The presence of calcium alumino-silicate hydrate (CASH) gel and additional calcium silicate hydrate (CSH) gel in processed LFS-based composites substantiated the modification in the hydration process. The optimized composite cement (10% processed LFS+90% OPC) demonstrated maximum cumulative heat (190 J/g) in the hydration analysis, indicating improved hydration characteristics, whereas 30% processed LFS in the binder system also showed cumulative heat 172 J/g. Therefore, based on studies, the processed LFS can be effectively utilized to develop a sustainable composite cement.