Cadmium (Cd) presents severe risks to human health and environments. The present study proposed a green option to reduce bioavailable Cd. Rice pot experiments were conducted under continuous flooding with three treatments (T1: intercropping azolla with rice; T2: incorporating azolla into soil before rice transplantation; CK: no azolla). The results showed that azolla incorporation reduced soluble Cd by 37% compared with the CK treatment, which may be explained by the decreased soil redox potential (Eh) (r = 0.867, P < 0.01). The higher relative abundance of Methylobacter observed in azolla incorporation treatment may account for dissolved organic carbon increase (r = 0.694; P < 0.05), and hence decreased the Cd availability for rice. Azolla incorporation increased the abundance of Nitrospira, indicating the potentially prominent role of nitrogen mineralization in increasing rice yields. Further, lower soluble Cd decreased the expression of OsNramp5, but increased OsHMA3 levels in rice roots, which decreased Cd accumulation in grains. Through these effects, azolla incorporation decreased Cd concentrations in rice grains by 80.3% and increased the production by 13.4%. The negligible amount of Cd absorbed by azolla would not increase the risk of long-term application. Thus, intercropping azolla with early rice and incorporating azolla into soil before late rice transplantation can contribute to safe production at large scales of double rice cultivation.