Climate change and rapid urbanization are adversely affecting the urban environment by exacerbating the widely reported Urban Heat Island effect in Dhaka, Bangladesh. Two wetland areas with variable riparian shadings in the warm-humid conditions of urban Dhaka had been investigated through field campaigns on microclimatic parameters for their cooling potential on the surrounding urban fabric. It was observed that an inversion layer of fully saturated air develops over the water surface of wetland, suppressing evaporation from the wetland water surface layer, which was effectively reducing the heat exchange between the water surface and the air layer above it through its action as an insulating vapor blanket. Because of this effect, the wetland was unable to render as a source of coolth for the surrounding overheated urban area. This effect of the inversion layer was more pronounced in the urban wetland without riparian shading either by urban form or tree canopy. A Multiphysics simulation study conducted on the selected urban wetlands indicates the effect of differential shading pattern on the relation between fetch and inversion layer thickness. This research hypothesizes that the wetland can act as an urban adaption measure against the urban heat island effect by potentially transforming them into Urban Cooling Island (UCI) towards a favorable urban bioclimate.