Concrete is arguably one of the most important and widely used materials in the world, responsible for the majority of the industrial revolution due to its unique properties. However, it is susceptible to cracking under internal and external stresses. The generated cracks result in a significant reduction in the concrete lifespan and an increase in maintenance and repair costs. In recent years, the implementation of bacterial-based healing agent in the concrete matrix has emerged as one of the most promising approaches to address the concrete cracking issue. However, the bacterial cells need to be protected from the high pH content of concrete as well as the exerted shear forces during preparation and hardening stages. To address these issues, we propose the magnetic immobilization of bacteria with iron oxide nanoparticles (IONs). In the present study, the effect of the designed bio-agent on mechanical properties of concrete (compressive strength and drying shrinkage) is investigated. The results indicate that the addition of immobilized Bacillus species with IONs in concrete matrix contributes to increasing the compressive strength. Moreover, the precipitates in the bio-concrete specimen were characterized using scanning electron microscope (SEM), X-ray diffraction (XRD), and energy-dispersive X-ray spectroscopy (EDS). The characterization studies confirm that the precipitated crystals in bio-concrete specimen were CaCO3, while no precipitation was observed in the control sample.