A composite biomatrix fabricated with collagen, ƙ‐carrageenan, hydroxyapatite reinforced with lanthanum oxide nanoparticles is explored as proangiogenic and osteogenic bone tissue repair biomaterial. The biomatrix shows increased physical and biological stability as observed from proteolytic degradation and thermal stability studies. The addition of lanthanum oxide nanoparticles facilitates good osseointegration coupled with simultaneous activation of proangiogenic properties to act as a bone mimicking material. The minimal level of reactive oxygen species and superior cytocompatibility help the as‐synthesized biomatrix in achieving capillary migration into the bone micro environment. The composite biomatrix upregulates the expression of VEGF, VEGF‐R2 genes in endothelial cells and osteopontin, osteocalcin in osteoblasts cells, respectively. The in vivo hard tissue repair experiment conducted in a rat model shows complete healing of the bone defect by eight weeks with the application of collagen‐ƙ‐carrageenan‐hydroxyapatite‐lanthanum oxide nanoparticle biomaterial when compared to the biomaterial made out of individual constituents alone. The biomaterial matrix gets biointegrated into the bone tissue and exerts its therapeutic value in bringing a faster osseo repair process. The study shows the feasibility of using rare‐earth metal nanoparticles in combination with protein‐polysaccharide biopolymers for bone regeneration.