Enzyme immobilization is a powerful tool not only as a protective agent against harsh reaction conditions but also for the enhancement of enzyme activity, stability, reusability, and for the improvement of enzyme properties as well. Herein, immobilization of β-glucosidase from Thermotoga maritima (Tm-β-Glu) on magnetic nanoparticles (MNPs) functionalized with chitin (Ch) was investigated. This technology showed a novel thermostable chitin-binding domain (Tt-ChBD), which is more desirable in a wide range of large-scale applications. This exclusive approach was fabricated to improve the Galacto-oligosaccharide (GOS) production from a cheap and abundant by-product such as lactose through a novel green synthesis route. Additionally, SDS-PAGE, enzyme activity kinetics, transmission electron microscopy (TEM) and Fourier transform infrared spectroscopy (FT-IR) revealed that among the immobilization strategies for Thermotoga maritime-β-Glucosidase thermostable chitin-binding domain (Tm-β-Glu-Tt-ChBD) on the attractive substrate; Ch-MNPs had the highest enzyme binding capacity and GOS production ratio when compared to the native enzyme. More interestingly, a magnetic separation technique was successfully employed in recycling the immobilized Tm-β-Glu for repetitive batch-wise GOS without significant loss or reduction of enzyme activity. This immobilization system displayed an operative stability status under various parameters, for instance, temperature, pH, thermal conditions, storage stabilities, and enzyme kinetics when compared with the native enzyme. Conclusively, the GOS yield and residual activity of the immobilized enzyme after the 10th cycles were 31.23% and 66%, respectively. Whereas the GOS yield from native enzyme synthesis was just 25% after 12 h in the first batch. This study recommends applying Tt-ChBD in the immobilization process of Tm-β-Glu on Ch-MNPs to produce a low-cost GOS as a new eco-friendly process besides increasing the biostability and efficiency of the immobilized enzyme.