This research is an attempt to upgrade Lakhra Lignite Coal using ‘Dense Medium Separation' technique, to make it techno-environmentally acceptable product for different industries. The air-dried samples of ROM (Run of Mine) coal were crushed, screened, ground and subjected to initial analysis and specific gravity based sink-float tests. The initial analysis of air-dried samples shows the average values of moisture 19%, volatile matter 22.33%, ash 27.41%, fixed carbon 31.26% and sulphur 4.98%. The investigational results of sink-float analysis indicate that physical cleaning at particle size range from -5.6 to +0.3 mm and 75% clean coal recovery can potentially reduce the ash yield and sulphur content of Lakhra coal up to 41 and 42.4% respectively. This washed coal is techno-environmentally acceptable yield and simultaneously qualifies the quality parameters set by various industries of Pakistan.