A system and method for the treatment and reduction of sludge via ozonation in a wastewater treatment process is disclosed. The sludge treatment system comprises: a sludge ozonation reactor coupled to an activated sludge treatment basin and adapted to receive a liquid stream of sludge containing biosolids from the activated sludge treatment basin. The sludge treatment system also includes an ozone-enriched gas injection system operatively coupled to the reactor and adapted to inject ozone-enriched gas into the liquid stream at or upstream of the sludge ozonation reactor. The sludge ozonation reactor is configured to allow effective gas-liquid contacting between the ozone-enriched gas and the liquid stream so as to oxidize the biosolids in the liquid stream and initiate bacterial cell lysis thereby reducing the biosolids. Upon reduction of the biosolids, the liquid stream is returned via a return line to the activated sludge basin or other discharge point.