Biomass fly ash (BFA) from a biomass cogeneration plant was encapsulated into calcium alginate microspheres (ALG/Ca) and characterized. An FTIR analysis indicated that BFA loading weakened molecular interactions between ALG/Ca constituents (mainly hydrogen bonding and electrostatic interactions), thus changing the crosslinking density. SEM and AFM analyses revealed a wrinkled and rough surface with elongated and distorted granules. The in vitro release of BFA’s main components (K, Ca, and Mg) was controlled by diffusion through the gel-like matrix, but the kinetics and released amounts differed significantly. The smaller released amounts and slower release rates of Ca and Mg compared to K resulted from the differences in the solubility of their minerals as well as from the interactions of divalent cations with alginate chains. The physicochemical properties of the novel microsphere formulation reveal significant potential for the prolonged delivery of nutrients to crops in a safe manner.