Immobilization has been reported as an efficient technique to address the bacterial vulnerability for application in bio self-healing concrete. In this study, for the first time, magnetic iron oxide nanoparticles (IONs) are being practically employed as the protective vehicle for bacteria to evaluate the self-healing performance in concrete environment. Magnetic IONs were successfully synthesized and characterized using different techniques. The scanning electron microscope (SEM) images show the efficient adsorption of nanoparticles to the Bacillus cells. Microscopic observation illustrates that the incorporation of the immobilized bacteria in the concrete matrix resulted in a significant crack healing behavior, while the control specimen had no healing characteristics. Analysis of bio-precipitates revealed that the induced minerals in the cracks were calcium carbonate. The effect of magnetic immobilized cells on the concrete water absorption showed that the concrete specimens supplemented with decorated bacteria with IONs had a higher resistance to water penetration. The initial and secondary water absorption rates in bio-concrete specimens were 26% and 22% lower than the control specimens. Due to the compatible behavior of IONs with the concrete compositions, the results of this study proved the potential application of IONs for developing a new generation of bio self-healing concrete.