One of the prime aims of the sustainable development strategies in many countries is to provide safe and secure environment for their inhabitants. This goal can be achieved through the use of environmental friendly building materials, commonly referred to as green building materials and the effective use of waste materials in useful applications such as construction industry. In Oman, saving the environment by finding alternative useful methods for re-using different kind of wastes and seeking ways to reduce the emission of harmful gases, and looking for affordable low-income housing for people are of great concern to the authorities in order to preserve and sustain the environment for the future generations. In order to fulfill such objective, research into the use sustainable materials in the construction industry is encouraged. Therefore, in the same context, this paper discusses the preliminary results from an ongoing research study on the use of produced water from the Petroleum Development Oman (PDO) Nimr and Marmoul oil-fields in the development of a new soil-cement block which possesses good strength, good thermal insulation and consume lower quantity of cement than the conventional one. Soil and water samples were brought from Marmoul and Nimr sites. The initial results indicated that both soil and water are suitable for production of compressed blocks with good mechanical properties.