New and evolving digital technologies are disrupting higher education in a positive way by creating new pathways for innovation, accessibility, and sustainability. As a result of development in technology such as artificial intelligence (AI), learning management systems, and blockchain, institutions can lob off some of these older structures in order to serve evolving student and societal needs more effectively. The shift towards digital manufacturing and support systems presents unique challenges and opportunities for more sustainable design, which can minimize ecological impact and adapt over a lifecycle. In this article, through systematic review, we discuss how digital transformation enriches learning environments and optimises data management and sustainability among higher education institutions. This paper seeks to explore some sustainable education paradigms that are being cultivated by new forms of digital transformation and a brief review of some ethical, legal, and practical implications predicated on these developments. The effort is made to compare the fundamentals of the digital transition in higher education and world sustainability and also intends to provide an exhaustive analysis of all the pre-existing traditional modes of using digital tools at higher education, along with practices and trends. A survey is conducted on tertiary institution students and educators to understand their perspectives on the digital transformation. About 94.1% of the survey participants in the tertiary institution have faith that digital transformation will have a positive impact in education. The key takeaway is that AI and digital technologies have the potential to enhance education, but they require further development to become sustainable reform efforts. Long-term digital transformation in higher education is a challenge but also very much an opportunity.