Waste stabilisation ponds are used widely in Australia and other parts of the world for treating wastewater from domestic and a wide range of industrial sources. It remains a popular form of treatment for wastewater for many small rural towns. The development of a two-stage, re-circulating waste stabilisation pond incorporating algal-bacterial biofilm represents a new approach to increasing the functioning biomass within the water column to improve treatment efficiency. This new approach will be a more viable and economical option for most of the existing waste stabilisation ponds to achieve significant nitrogen removal than converting them to another form of biological nutrient removal processes. A laboratory-scale, two-stage, re-circulating system incorporating “Bio-Tube” plastic modules as attached growth medium has been tested using synthetic wastewater. It has been proven that nitrification–denitrification was the primary mechanism for nitrogen removal in such a system operated under complete mix conditions. During the experimental period, average removal efficiencies of 90–95% of ammonia nitrogen and 65–85% of total nitrogen removal were achieved with influent COD of 600 mg/L and total nitrogen of 70 mg/L.