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Under the new normal, the digital economy, as an essential engine of the new round of digital revolution, plays a significant role in driving the development of a green economy. This article constructs a logical framework from the perspective of economic agglomeration, using panel data from 2005 to 2019 in China's prefecture-level cities to empower green economic efficiency through the development of the digital economy. It then examines the enabling effect of the digital economy on green economic efficiency. The findings demonstrate that: (i) The digital economy has the potential to enhance the efficiency of the green economy, and this conclusion remains valid even after accounting for endogeneity and conducting a series of robustness tests. (ii) The results of the multi-mediation effect model demonstrate that enhancing economic agglomeration, facilitating industrial structure upgrade, and fostering technological innovation in energy saving and emission reduction serve as driving mechanisms for digital economic development to enhance urban green economic efficiency. (iii) In identifying heterogeneous characteristics, it was found that the enhancing effect of digital economic development on green economic efficiency is more pronounced in 'megacities', 'large', and 'medium' cities in eastern China, with better spillover effects. [ABSTRACT FROM AUTHOR]