Higher education systems are under increasing pressure to embrace technology-enhanced learning as a meaningful step towards the digital transformation of education. Digital technologies in education promise optimal teaching and learning, but at the same time, they put a strain on education systems to adapt pedagogical strategies. Classical pedagogical frameworks such as Dewey, Piaget, and Vygotsky’s theories focused on student agency and are not specific to contemporary education with ubiquitous digital technologies. Hence, there is a need for a novel and innovative pedagogical framework that aligns with these emerging and advanced digital technologies. However, recent guidelines to incorporate emerging digital technologies in education have largely focused on ethical dimensions and assessment practices. The lack of an overarching pedagogical framework for teaching and learning practices in the digital era is a threat to quality education. The current study proposes a digital pedagogy for sustainable educational transformation (DP4SET) framework applicable to the new modes of teaching and learning powered by digital technologies. The DP4SET framework comprises four components that advocate for digital competence for accessing deep learning, evidence-based practice with quality digital resources, learning environments with applicable digital technology, and synergy between human teachers and trustworthy artificial intelligence (AI). A real-world application of the DP4SET framework in Chinese contexts proves that it promotes the effective use of technology and significantly reshapes teaching and learning in and beyond the classroom. The proposed digital pedagogy framework provides a foundation for modern education systems to accommodate advanced digital technologies for sustainable digital transformation of education.