<p>Integrating sustainable construction in all facets of the construction industry is made possible by achieving net zero waste through environmentally friendly techniques. Therefore, this study applies a state-of-the-art review to examine the potential use of a dynamic BIM-based waste management system to reduce or eliminate waste throughout the construction lifecycle, supply chain, and construction and demolition operations to facilitate net zero transitioning in cities. Initially, an innovative BIM-based model was developed to efficiently manage waste and facilitate the transition to net-zero in urban development. A prism flow diagram was designed to visualize the screening process of all literature used, and all essential components of the BIM-based system have been identified during the construction phase. The planning phase results show that BIM technology may be utilized to develop an efficient schedule for procuring materials, fabrication, and delivering of all building components. Any modifications made to the building model during the design phase are automatically reflected. 3D geometry can be utilized for energy analysis, take-offs, and project sequencing during the procurement stage. Also, BIM technology can be utilized in the operation phase for maintenance scheduling, building system analysis, asset management, tracking and/or space management, and disaster planning, virtual construction modeling, which is incredibly cost-effective, can be used during the construction phase. This study’s main conclusion is that a BIM-based waste management system can reduce and even eliminate waste in the construction industry. Therefore, in every country’s construction industry, the application of a BIM-based system that aligns with the long-term advantages invested in its design and process should be motivated by necessity and a requirement for sustainability.</p>