This article deals with the synthesis of hybrid nanocomposite hydrogels through the combination of cellulose (C), polypropylene oxide/poly ethylene oxide (PPO/PEO), and silver nanoparticles (AgNPs) by in situ polymerization technique for the in vitro release of ornidazole drugs. The structure of the resulted materials is identified using SEM, XRD, FTIR, XPS, and TGA spectroscopic techniques. The resulting structure, morphology, thermo responsive property, water retention, and swelling behavior of hydrogels are investigated. The rheological measurement is studied to establish the enhancement of the viscoelasticity and stiffness of hydrogels. The antibacterial activity of the biodegradable silver hybrid nanocomposite hydrogel is investigated by inhibition zone method against gram positive and negative bacteria. Maximum drug release of 96.4% is recorded at 7.4 pH in 5 h. The biocompatibility and cytotoxicity of the hybrid nanocomposite hydrogel are verified using mouse fibroblast cell line L-929 (ATCC CCL-1) cells for their possible use as controlled drug delivery vehicles. The nontoxic nature makes the materials more biocompatible and suitable to apply in the biological systems. Therefore, nontoxic and biocompatible natures of present materials with improved thermal and rheological properties support for their possible uses as drug delivery vehicles.