Managing environmental problems invited by industrial agglomeration has become a crucial issue at this stage of the new-type urbanization process. Based on the panel data of prefecture-level cities in China’s Yangtze River Economic Belt from 2006 to 2018, we used location entropy and dynamic factor analysis to measure industrial agglomeration and the level of new-type urbanization, respectively. Then, we used the System Generalized Method of Moments model to examine the dynamic effect of industrial agglomeration on the ecological environment and synergies between industrial agglomeration and the ecological environment in new-type urbanization. The findings show that (1) industrial agglomeration in the current period significantly deteriorates the ecological environment. Conversely, industrial agglomeration in a lagging period significantly improves the ecological environment. (2) Population size in a lagging period contributes more to environmental quality than in a current period. Additionally, technological progress in both current and lagging periods contributes to improving the quality of the ecological environment. (3) There is a significant synergistic effect between industrial agglomeration and ecological environment quality in the lagging period of high-level new-type urbanization compared to the low-level new-type urbanization stage. Meanwhile, regardless of the level of new-type urbanization, the synergy between industrial agglomeration and ecological quality is not significant in the current period.