In the construction industry, cementitious additives are widely used for the purpose of soft soil improvement. Although cement mixing one of the suitable method for soft soil improvement, it is considered to be an expensive method. Therefore, this research has attempted to study the use of an industrial waste; Fly ash to improve soft soils. Fly ash is a fine, glass powder recovered from the gases of burning coal during the production of electricity at Norochchole, thermal power plant in Sri Lanka. The goal of this research is to improve a sludge which is a byproduct of waste of water treatment plants. From water treatment plants, the larger amount of sludge which is a very soft clayey soil, is disposed into the environment without getting any benefit. Improving low Maximum dry density and low CBR value of soil using Fly ash will solve few burning issues such as dumping of fly ash, dumping sludge, health issues due to disposal of sludge, finding soils with better properties for road constructions and other construction related applications. The key findings of this study are identifying the characteristics of the sludge, studying the variation of maximum dry density and optimum moisture content with fly ash content, strength gain with time, and the applicability of the improved soil in the industry. It was observed that the optimum proportion of the fly ash to be added to the sludge to achieve the best properties is around 30% of its dry weight. Acceptable CBR value was achieved after 7 days curing followed by standard 4 days soaked period.