This comprehensive review addresses the vital environmental concerns posed by conventional petroleum-based plastics, particularly in the context of the packaging industry’s extensive reliance on these materials. As nearly 99% of plastics originate from non-renewable petrochemical sources and their non-biodegradable nature leads to widespread waste accumulation and harmful emissions upon disposal, the need for sustainable alternatives has become paramount. This paper explores the escalating environmental and health repercussions linked to traditional plastics, underscored by global initiatives, including restrictions on single-use plastics, aimed at mitigating these challenges. In response, the paper highlights the growing interest in environmental friendly biopolymers, which can be sourced from renewable biological materials or synthesized from biopolymers such as starch, casein etc. The classification of biopolymers into three primary categories; natural biopolymers, microbial fermentation-derived biopolymers, and polymerized monomers from biomass is comprehensively examined. Furthermore, the paper emphasizes the pivotal role of biopolymer properties, such as barrier characteristics, mechanical strength, heat resistance, biodegradability, flexibility, food contact safety, and cost-effectiveness, in determining their suitability for packaging applications. It also stresses the importance of conducting life cycle assessment (LCA) to holistically evaluate the environmental sustainability of biopolymers. This review highlights the potential of integrating biopolymers into packaging materials as a promising avenue to reduce the adverse environmental impact of traditional plastic production. These biodegradable materials, with their diverse properties and renewability, offer a sustainable approach to mitigating plastic waste and lowering greenhouse gas emissions. However, further research, development, and collaborative efforts are essential to optimize biopolymer performance, reduce production costs, and facilitate broader adoption. Embracing biodegradable polymers represents a commitment to resource efficiency, waste reduction, and environmental preservation, fostering a more sustainable and eco-friendly future.