In the present study, an engineered cyanobacterial biofertilizer (immobilized Al- acclimated cyanobacterial cells) which could be further used as inoculum to affect the overall productivity of containerized rice plants has been proposed. The cyanobacterium Nostoc muscorum (N. muscorum) was well acclimatized to Al metal by initially subjecting the cells to very low dose (0.1 µM) of Al and subsequent transfer every 15 days to the higher concentrations (1, 10, 20, 30, 40 and 60 µM) of Al with regular growth study at each step of cells transfer to the higher concentration and immobilized in calcium alginate beads and were examined for their growth in terms of content of chlorophyll a, heterocyst frequency and ammonia excretion. Growth was more pronounced in Al- acclimatized immobilized state than under free state. Heterocyst frequency and ammonia excretion were considerably higher under immobilized state than under free-living conditions. Results also showed the ameliorative role of Al- acclimatization in N. muscorum exposed to UV stress. Air dried Al- acclimatized immobilized cells stored under light, temperature, air and dust retained the ability to regenerate the viable colonies for upto months. From the experiments performed, it is witnessed that calcium alginate does not cause any opposing effect on regeneration potential and N₂ – fixing capability of N. muscorum and the air- dried beads are appropriate to store and easy to transport. Thus the present study will provide stress tolerant biofertilizer with improved storage capability and portability enabling more sustainable and efficient production in agriculture.