The current study focused on developing a biodegradable implant composite material that could work in a multitude of applications. The fabricated composite showcases a porous matrix of Mg–hydroxyapatite developed through the spacer-holder technique. The composite was incorporated with a natural medicinal plant, i.e., Aloe barbadensis miller, commonly known as the Aloe vera plant. The final composite was enveloped under a thin layer of PLA to work as an encapsulated drug as well as a composite material for implant applications. Further, the mechanical and microstructural properties were analyzed along with corrosion analysis through the weight loss method and pH change. The experiments showed an improvement in the corrosion rate when tested under cell culture medium. The antibacterial rates were experimented with under different aloe vera concentrations against Gram-positive B. subtilis and Gram-negative E. coli, and finally, a minimum inhibitory value was formulated for further experimentations. Hemocompatibility and surface wettability tests were also performed, which revealed improved surface hydrophilicity with a reduced hemolysis rate. An in vitro cell viability analysis was performed against the MG63 osteoblast cell line to indicate the cytotoxicity and cytocompatibility of the samples. This research proposed a novel composite material that provides antibacterial and non-toxic properties and retains its strength under a physiological environment.