Excess nutrients (N and P) discharged from sewage treatment plants has been identified as one of the major pollution point sources leading to eutrophication in the coastal water. Microalgae have been demonstrated as excellent nutrients stripper from the sewage. However, its application is limited by its harvesting problem at the end of the treatment process. In this study, the unicellular green alga Chlorella vulgaris was immobilized in two polysaccharide matrices, namely carrageenan and alginate, in form of spherical beads and was used to treat primary settled domestic wastewater in order to eliminate the harvesting limitation. Growth of the algal cells in the matrices was not inhibited and the exponential growth rates were 0.420, 0.441 and 0.417 day−1 for the free, carrageenan and alginate immobilized cells, respectively. Although algal cells in the carrageenan and alginate matrix exhibited a longer lag period (2 and 3 days, respectively) than the free cells (1 day), the immobilized cells were more metabolically active and attained a higher maximum chlorophyll content (2.80 and 2.34 pg cell−1, respectively) than the free cells (1.4 pg cell−1) in compensating the self-shading and gel screening effects. Correlated with the higher metabolic activity, over 95% of N and 99% of P were removed from the wastewater in 3 days by the immobilized algal beads. This was much more efficient than the free cell system which reduced only 50% N and P in the same time regime. The interaction between the polysaccharide matrices and the nutrient ions also enhanced the nutrients removal efficiency. The polyanionicity of the carrageenan gel adsorbed the NH4+-N ions and shuttled them from the wastewater to the embedded algal cells, while the calcium ions associated with alginate gelling precipitated the PO43−-P ions. Cell leakage was not perceivable from both carrageenan and alginate algal beads for a treatment time of 3 days. However, carrageenan algal beads was preferred for prolonged treatment time (>3 days) or high phosphate containing wastewater. Results demonstrated that immobilized algal system could be a potential alternative system in stripping nutrients from primary settled wastewater to reduce the nutrient load from the sewage treatment plants to coastal water.