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Synthetic petroleum-based products are normally used for food-packaging application which results in environmental pollution. This creates a need to develop biodegradable polymer and polymer-based films to maintain the stability of packed materials for a defined period of time that will overcome the drawbacks of the synthetic petroleumbased packaging system. The current work is focussed on evaluating the potential of cellulose agar bio-nanocomposite films in food packaging application. The physical and mechanical properties such as its tensile strength (TS), Young's modulus (YM) and elongation at break (E) were found to be increased on loading with cellulose microfibre (CMF). TS is found to be increased from 38.8 ± 3.2 to 49.4 ± 4.3 and there is about 6% increase in the elongation at break. Similarly, CMF films exhibit 54 ± 0.2% water solubility, 1.304 opacity and 1.71 ± 0.07 GPa, respectively. Also, the bionanocomposite film showed less swelling property and an increase in soil degradation rate, enabling it to be applied in food packaging.