•Citric acid based flame retardant (FR) system is developed for lyocell apparel fabric.•Used with FR (Pyrovatex CP New), samples achieve Class 1 flammability.•Treated samples are thermally stable up to 10 wash cycles, giving high char yield.•75% reduced formaldehyde content compared to conventional melamine based FR system. Pyrovatex CP New, is a commonly used organophosphorus based flame retardant (FR) reagent for cellulosic materials. However, it has a drawback of high formaldehyde release when used with methylated melamine (MM) based cross-linker, a known carcinogenous compound. In the present approach, a durable and sustainable flame retarding recipe formulation for lyocell fabrics is developed using citric acid (CA) as a cross-linker. The FR finish was applied by pad-dry-cure process. The treated fabrics were characterized for surface morphology, elemental analysis, TG analysis, char study and FT-IR spectroscopy. Furthermore, flame retardancy, washing durability, formaldehyde release and breaking strength were also assessed, and compared with the conventional MM based FR recipe. The fabric samples treated with 400gL−1 of FR with either 40 or 80gL−1 of CA demonstrate flame retardancy even after 10 washing cycles. Furthermore, a 75% reduction in formaldehyde release is achieved. Higher char yield and lower decomposition temperature are found compared to untreated and FR+ MM treated lyocell. Such an improved sustainable recipe formulation can be used for lyocell fabric without any health risk in apparel wear.