The development of a universal carrier for sparingly soluble drugs (SSDs) remains a challenge to achieve an effective delivery system. To address this issue, surface active ionic liquid (SAIL) based micellar systems have emerged as a prominent drug delivery carrier to increase the solubility of SSDs due to their exceptional physico-chemical properties. Herein, we report a new micellar formulation (MF) for SSDs (e.g., naproxen, ibuprofen and rosuvastatin) comprising a biocompatible SAIL choline oleate ([Cho][Ole]). The solubility of Naproxen, Ibuprofen and Rosuvastatin 138, 237 and 158-fold greater, respectively, in the developed MF as compared to their solubility in water due to the presence of hydrogen-bond, π–π interactions, and cation–π interactions between the drug and SAIL[Cho][Ole]. No indications of drug precipitation, color change, phase separation, or flocculation as well as no discernible change in the quantity of NAP were found indicating the exceptional stability of NAP-loaded MF. In vitro release studies of NAP-loaded MF were carried out using phosphate-buffered saline (PBS) with dialysis membranes, simulating the buffering conditions of physiological body fluids. This experiment showed a 50–60% burst release of NAP within first 4 hours, with no substantial release after 12 hours, suggesting a sustained release of NAP. Furthermore, cytotoxicity studies of SAIL[Cho][Ole]-based MFs were conducted to evaluate the relative safety effect of the MF. The result was found that the LC50 of SAIL[Cho][Ole] was 73.33 µg/mL whereas positive control was 0.159 µg/mL, indicating the lower toxicity of SAIL[Cho][Ole]. These results clearly suggest that the SAIL[Cho][Ole]-based aqueous MFs represent a promising substitute to conventional surfactant-based MFs and can be used as a biocompatible carrier for SSDs as well as a valuable strategy for drug delivery systems at different therapeutic areas.