The current paper explores the possibility of producing alkali-activated fly ash-based lightweight blocks with adequate properties at lower curing temperatures to use in various construction applications. Sodium-based alkaline activators are utilized to activate the fly ash. Two different curing temperatures are employed, 60 °C and 85 °C. The properties of the block, such as strength, density, and thermal conductivity, are evaluated. Aeration experiments reveal that the addition of Al powder to the paste leads to the collapse of the bubble structure. However, the addition of nano clay aids in stabilizing the formed bubbles, thereby preventing their collapse and maintaining the integrity of the aerated structure over time. The amount of nano clay depends on the quantity of Al powder added to the paste. Across all samples, strength is found to be inversely proportional to density and thermal conductivity. At 0.3% and 0.4% Al powder dosages, samples attained similar ultimate strength regardless of curing temperature, while density and thermal conductivity varied. The block achieved a strength of approximately 10.60 MPa and a thermal conductivity of 0.090 W/mK at a corresponding density of 450 kg/m³, which is higher than the IS standard codal provisions. The blocks were characterized using various analytical techniques such as XRD, FTIR, and SEM. The strength of the block depends on the reaction product formed during the activation process, with all techniques indicating the formation of stable sodium aluminosilicate gel. For samples cured at 60 °C, two new crystalline phases, trona and sillimanite, were observed. Trona is formed at the age of 28 days, while sillimanite forms at an early age, with its quantity decreasing over time. In conclusion, the study offers crucial insights into producing alkaline-activated fly ash-based lightweight blocks with satisfactory performance at lower curing temperatures.