Two emerging challenges that could impede infrastructure development in India are achieving 100% utilization of fly ash generated by Indian thermal power plants and meeting the demand for aggregate in the construction sector. The paper discusses the engineering properties and performance of a novel angular-shaped fly ash aggregate (AFA) as a complete replacement for natural stone aggregate in wet-mix macadam (WMM) layer of pavement through laboratory investigation. After curing fly ash blocks in a hot water bath or autoclave, the high-strength blocks were crushed to produce AFA of the required sizes. The study used 98% Class C fly ash with 2% lime mix and 88% Class F fly ash with 12% lime mix for manufacturing two types of AFA in the laboratory. The properties of AFA, such as specific gravity, angularity number, water absorption, impact value, crushing value, abrasion value, and soundness, were compared with the required specifications given in the relevant Indian standards. Compaction characteristics, particle breakage, slake durability and leachability of AFA, were also investigated. The performance of AFA under cyclic and shear loading was investigated using cyclic triaxial tests and large box direct shear tests, respectively. AFA was found to be well-graded before and after the compaction. The results of the slake durability tests showed that AFA performs well even when subjected to severe wet and dry conditions. AFA exhibited resilient modulus (Mr) value of 129.1 to 149.7 MPa and internal friction angle of 42.73 degrees to 50.75 degrees. Based on the cyclic triaxial and shear test results, it was found that replacing natural aggregate with AFA in the WMM layer has satisfactory performance under traffic and shear loading. The results of leachate test showed that the AFA is safe for the environment. Depending on the type of fly ash used, the approximate production cost of AFA was estimated to be 16% to 65% lower than the cost of natural aggregate.