A significant challenge in the clothing industry is sustainable manufacturing with reduced exposure to toxic chemicals. This research presents a novel modification in the resin finishing of cotton fabric via successful compounding of etherified DMDHEU resin, waterborne polyurethane (WPU), and polyethylene wax (PEW) and its application by one-step eco-friendly route (Pad-Dry-Cure). Our hybrid finish formulation (DMDHEU resin/WPU/PEW) perfectly balanced ultra-high wear resistance, fast wrinkle recovery rate, and comfort properties. The optimal application conditions for etherified 2D resin and the conventional catalytic system magnesium chloride (MgCl2) were determined through the PAD-DRY-Cure finishing route, focusing on parameters such as resin concentration, curing time, and temperature. Second, a compounding of waterborne polyurethane (WPU) and etherified DMDHEU resin finish formulation was obtained, followed by an application and evaluation of the corresponding performance properties of the finished fabric with the compounded DMDHEU resin/WPU. Third, polyethylene wax (PEW) synthesis followed by cotton fabric finishing using optimized PEW and DMDHEU resin/ WPU hybrid finish formulation was done. Finally, finished fabric properties were investigated via scanning electron microscopy (SEM) and X-ray diffraction (XRD) structural analysis to examine its microstructure. Under optimized finishing conditions, the hybrid finish formulation consisting of MDHEU resin/WPU/polyethylene wax (PEW) application on cotton fabric demonstrated efficient wear resistance, high wrinkle recovery rate, and good laundering durability. Additionally, there was minimal loss of tensile strength and better air and water permeability, indicating enhanced wearing comfort.