To explore a feasible method of utilizing municipal solid waste incineration fly ash (IFA) rather than releasing it into solidified landfill, in this work, IFA was pretreated by mixing it with municipal sewage sludge (MSS) and applying hydrothermal treatment (HTT). The influences of the IFA dosage, HTT temperature, HTT time, and liquid to solid ratio (L/S) on the dewatering, chlorine migration, solidification, and leaching of heavy metals (HMs) in MSS were investigated. The results show that the synergistic effect was obtained, IFA enhanced the dewatering of MSS and in return, MSS improved the release of chlorine in IFA. The optimal pretreatment conditions were an IFA dosage of 5%, HTT temperature of 180 °C and HTT time of 60 min. The moisture of the solid residue after HTT could be controlled below 40%. Under a fixed IFA dosage, the chlorine content of the liquid could be reached almost 50% with increasing HTT temperature, and the chlorine distribution exhibited a strong positive correlation with the L/S ratio (R² >0.90). The migrating chlorine was mainly derived from its soluble state, which was controlled by the HTT liquid volume. After the soluble chlorine was dissolved, bound chlorine compounds, such as CaCl(OH), gradually neutralized and released chlorine into the liquid during HTT, and finally reached an equilibrium as the L/S ratio continued to increase. In addition, during HTT, satisfactory HM immobilization performance was achieved and the fraction of HMs, such as Cr, Ni, Cu and Zn, stabilized.