Electricity crisis has become a key issue in Pakistan mainly due to a tenacious and spreading gap between demand and supply. Moreover, the current production is causing severe environmental and energy security issues due to reliance on thermal sources. Stakeholders are hindered to address these issues due to a significant knowledge gap causing discrepancies in power policies. A comprehensive approach over the sustainability dimensions is missing due to non-adoption of life cycle thinking. This study adopts an integrated approach of life cycle sustainability assessment of the electricity sector in Pakistan for proposing policy guidelines and implementation framework to optimize the future energy mixes. In total, 20 sustainability indicators have been assessed covering life cycle of seven electricity generation sources, currently in use. These sources have been ranked by equally weighting the sustainability dimensions and respective indicators. Hydropower is found as the most sustainable option having lowest environmental and economic impacts. While due to worst economic and social impacts, oil is found to be the least sustainable option for the country. While establishing tradeoffs between different electricity generation sources, this study presents an unbiased view and highlights the worth of life cycle approach in sustainability assessment for improving the energy policies.