Human-induced land use changes like agriculture and urban development occur commonly at the cost of natural wetlands, which require immediate attention and sustained efforts from urban planners and concerned governments. In view of the East Kolkata Wetlands (EKW), India, this paper has examined the trend, causes, extent and impacts of landscape transformation during the last few decades. Hence we aim to present a review of several studies in and around EKW and suggests a sustainable model for EKW. This 'Ramsar site of International Importance' is one of the world's largest wastewater-fed aquaculture systems where the city sewage is recycled for pisciculture and agriculture, and acts as flood resistance for the city of Kolkata. Rapid encroachment in the EKW due to unplanned development has caused various environmental, social and economic impacts. The key ecological impacts found in the study included loss of faunal and floral diversity, eco-toxicological impacts, etc. In terms of biodiversity loss, while the number of bird species in the EKW decreased from 248 in 1960s to 72 in 2005, about 59% fish species are near threats, vulnerable and endangered. Reported persistent organic pollutants (POPs) around the EKW region were found to pose deleterious impact on environment and ambient biota. Several studies have evidenced that the open burning of solid waste in the dumping ground of Dhapa is a potential source of polychlorinated biphenyls (PCBs) and polychlorinated dibenzo dioxin/furans (PCDD/Fs). Further the ecological transformation of the EKW focussing on policy development and regulatory compliance issues has been studied in this paper. The aspects of encroachment and wetland shrinkage triggered by economic drivers like urban sprawl have been analyzed. The paper presents adaptive co-management as the future roadmap for action to curb further degradation of the wetlands, and adopt an integrated approach of environmental, political, physical, economic and institutional aspects. It is envisaged that the adaptive co-management model will contribute to long-term sustainable sustenance of this precious ecosystem.