In this research, we report an efficient method to prepare highly active chitosan-coated magnetic iron oxide nanoparticles by implementing co-precipitation technique which is used for wastewater treatment applications. Chitosan-coated magnetic iron oxide nanoparticles were synthesized and characterized using TEM, XRD, and XPS. A comparative study has been made between chitosan powder and chitosan coated with magnetic nanoparticles with respect to the rate of adsorption of copper from aqueous solution. It was also experimentally verified that chitosan coated magnetic iron oxide nanoparticles are much more effective in adsorption of heavy metals than chitosan powder and it takes just few minutes instead of hours. Moreover, the super paramagnetic behavior of the chitosan coated with iron oxide nanoparticles enabled the easy removal through applying an external magnetic field and hence leaving the solution free from copper.