Abstract: Dredged sludge with high water content requires time-consuming and high-cost drying and solidification treatment. To address this, we utilize the unique hydration properties of phosphogypsum-based powder to develop a continuous drying-solidification method for fluid sludge. A comparative study on the physico-mechanical properties and microstructure of phosphogypsum-based powder and Portland cement-stabilized sludge is conducted to reveal the mechanism of continuous drying-solidification. The results show that: (1) The phosphogypsum-based powder yields substantially higher stabilization strength compared to OPC (Ordinary Portland Cement). For sludge with an initial water content of 110%, the 90-day strength reaches 1493.6 kPa, significantly surpassing the 853.0 kPa achieved with OPC. (2) The enhanced performance is attributed to the powder's sustained water absorption and continuous formation of ettringite (AFt), which effectively converts free water into crystalline water, creates localized dewatering micro-environments, and provides persistent pore-filling and cementation. In contrast, the high initial water content severely restricts OPC's hydration, relegating it primarily to a physical filling role. (3) The drying effect of the phosphogypsum-based powder occurs mainly during early hydration (within 7 days), while solidification dominates later (28-90 days), resulting in a "slow-fast" strength development pattern. Thus, stabilized sludge by phosphogypsum-based powder exhibits lower early strength but significantly higher long-term strength than cement-stabilized sludge. Considering technical and economic requirements, a 15% mass dosage of phosphogypsum-based powder content is recommended for treating sludge with an initial water content of 110%.