A shortcut nitrogen removal process was investigated for treatment of high ammonium strength wastewater using an algal–bacterial consortium in photo-sequencing batch reactors (PSBRs). In this process, algae provide oxygen for nitritation during the light period, while denitritation takes place during the dark (anoxic) period, reducing overall energy and chemical requirements. Two PSBRs were operated at different solids retention times (SRTs) and fed with a high ammonium concentration wastewater (264 mg NH4+-N L−1), with a ‘12 hour on, 12 hour off’ light cycle, and an average surface light intensity of 84 μmol m−2 s−1. High total inorganic nitrogen removal efficiencies (∼95%) and good biomass settleability (sludge volume index 53–58 mL g−1) were observed in both PSBRs. Higher biomass density was observed at higher SRT, resulting in greater light attenuation and less oxygen production. A mathematical model was developed to describe the algal–bacterial interactions, which was based on Activated Sludge Model No. 3, modified to include algal processes. Model predictions fit the experimental data well. This research also proposes an innovative holistic approach to water and energy recovery. Wastewater can be effectively treated in an anaerobic digester, generating energy from biogas, and later post-treated using an algal–bacterial PSBR, which produces biomass for additional biogas production by co-digestion.