The primary focus of this study is to develop non-structural ultra-lightweight circular building insulation materials by utilizing a substantial amount of construction and demolition waste (CDW). A unique type of Eco-hybrid cement was formulated as the binder phase, while fine recycled concrete aggregates (FRCA) were used in the aggregate phase. The physical, mechanical, and thermal conductivity properties of the mixtures were assessed by altering the content of Eco-hybrid cement, FRCA, foaming agent, silica-aerogel and water-to-binder ratio. The findings indicated that the fresh properties are primarily influenced by the FRCA and foaming agent ratio, whereas the mechanical properties are predominantly associated with the Eco-hybrid cement and foaming agent content. Microstructural analysis revealed that thermal performance is greatly affected by the pore size distribution and their interconnectivity. Consequently, an ultra-lightweight green foam concrete was successfully developed with a dry density of 0.514 g/cm3 and a thermal conductivity of 0.049 W/mK.