Gamma-valerolactone (GVL) is a useful chemical with various applications obtained from the hydrolysis of lignocellulosic biomass. The present study aims to explore the synthesis of GVL through the hydrogenation of ethyl levulinate (EL) using a palladium−manganese bimetallic catalyst immobilized on a dendritic fibrous nanosilica (Pd x% −Mn y% /DFNS). The key strategy in this reaction involves utilizing the formic acid (FA) decomposition reaction to generate indirect hydrogen and catalytic transfer hydrogenation (CTH) process to convert EL to GVL, a safe and environmentally friendly method. As an economical and available source, EL has less acidity than LA and is more easily separated from the reaction medium. Also, FA (as a byproduct in various processes) can be used as a liquid medium to store hydrogen gas (without the risk of explosion). It can be a potential solution for long-term energy storage by considering the necessary infrastructure. This research showed that the catalytic activity of Pd has developed in the presence of Mn and DFNS and can be affordable. In this reaction, various parameters were investigated. Under the best conditions (1 mL of ethyl levulinate, 3 mL of formic acid, 3 mL of deionized water, 2 g of sodium formate, 50 mg of Pd 6% −Mn 3% /DFNS catalyst, and 8 h), the yields obtained for GVL are 70 and 99.5% at 180 and 230 °C, respectively. Meanwhile, the yield of GVL under the same conditions (without formic acid and sodium formate) using direct molecular hydrogen (2 MPa) at 180 °C was 76%. Also, various methods were used to characterize the catalysts, including Fourier transform infrared spectroscopy (FT-IR), X-ray diffraction, Brunauer−Emmett−Teller, inductively coupled plasma mass spectroscopy, X-ray photoelectron spectroscopy, transmission electron spectroscopy, field emission scanning electron microscopy, and elemental mapping.