Low bioavailability of phosphorus (P) in alkaline/calcareous soils leads to low yields due to its precipitation/fixation with calcium (Ca). An effective method to enhance phosphorus use efficiency (PUE) and its availability to plants is the application of alginate bioaugmented coated di-ammonium phosphate (DAP). In this study, the pre-isolated P solubilizing Paraburkholderia phytofirmans (PsJN) coated with different concentrations of polymer (alginate) on DAP with and without carbon source was tested in incubation, pot, and field experiments to investigate microbial survival, Olsen P release, and its availability to plants. Results indicated that the maximum recovery of PsJN loaded on alginate at 30 days incubation with and without carbon source was 199 × 1010 and 82 × 106 CFU mL−1 respectively. Application of alginate bioaugmented DAP released 962 mg kg−1 Olsen P after 60 days of incubation compared to 280 and 370 mg kg−1 Olsen P released by uncoated and simple alginate coated DAP, respectively. Results from pot trial revealed that application of 100% alginate bioaugmented DAP increased 26% plant height, 31% photosynthetic rate, 55% grain yield, and 6 × 105 CFU g−1 root bacterial population, compared to uncoated DAP. Field trial results indicated that 22% grain yield, 14% straw yield, and 44% agronomy P efficiency were increased by applying 100% alginate bioaugmented DAP compared to uncoated DAP. This new approach resulted in controlled release of P from coated DAP that not only reduced phosphorus fixation but also enhanced the bioavailability of P to plants.