We report here the production of pure (R,R)-2,3-butanediol (2,3-BDO) isomer by the non-pathogenic Paenibacillus polymyxa ICGEB2008 using lignocellulosic hydrolysate as substrate. Experimental design based on Plackett-Burman resulted in identification of Mn and K as most crucial salt elements along with the yeast extract for 2,3-BDO production. Further experiments using Box-Behnken design indicated that both KCl and yeast extract together had major impact on 2,3-BDO production. Optimized medium resulted in 2,3-BDO production with 2.3-fold higher maximum volumetric productivity (2.01 g/L/h) and similar yield (0.33 g/g sugar) as compared to rich yeast extract-peptone-dextrose medium in the bioreactor studies. Considering that the balance substrate was channeled towards ethanol, carbon recovery was close to theoretical yield between the two solvents, i.e., 2,3-BDO and ethanol. Biomass hydrolysate and corn-steep liquor was used further to produce 2,3-BDO without impacting its yield. In addition, 2,3-BDO was also produced via simultaneous saccharification and fermentation, signifying robustness of the strain.