Potable groundwater contamination through arsenic (As) is a common environmental problem in many developing countries, including Pakistan, with significant human health risk reports. The current research was conducted in District Nankana Sahib, which is a major industrial site in Punjab, Pakistan. According to the Punjab Directorate of Industries in Pakistan, there are more than a thousand industries in this area. These industries produce a lot of waste and effluent, which contaminate the environment with harmful and toxic materials. Continuous irrigation with industrial effluent and sewage sludge may make groundwater sources vulnerable. Therefore, this research was aimed as assessing the hydrochemical profile of groundwater concerning As contamination in the study area using sixty-seven groundwater samples. Multivariate statistical analysis, graphical plots, geochemical modeling, and the water quality index (WQI) were applied to investigate the hydrochemistry of the research area. The outcomes of the WQI revealed that 43% of the samples were of poor quality and not fit for human consumption. About 28% of the groundwater samples showed high arsenic contamination beyond the permitted limit of the World Health Organization (WHO). The piper plot identified three distinct types of water in the research area: calcium, chloride, and calcium-chloride types. The Gibbs diagram illustrated that rock–water interaction influenced the hydrochemistry. Terrigenous sedimentary rocks, such as stream deposits, flood plain deposits, and detrital sedimentary rocks, among other types of sedimentary rocks covered most part the study area. Principal component analysis (PCA) and hierarchical cluster analysis (HCA) indicated that the arsenic in groundwater exhibited a significant positive correlation for pH, Fe and As. Health risk assessments indicated a hazard quotient (HQ) greater than 1, indicating a 28% contribution showing that groundwater ingestion is highly toxic to the local habitats. The results of this study further help in managing future sustainable groundwater management approaches in the Nankana District, Punjab, Pakistan.