In this study, eco-friendly biodegradable polyvinyl alcohol (PVA) based film incorporated with cellulose Nano particles (CNP) and fennel seed oil was developed. The properties of the above film was compared with chitosan Nano particle (CHNP) incorporated PVA film, and a PVA based film with a combination of CHNP and CNP. Mechanical and physical property study recommended CNP-PVA combination as the best one. Cellulose Nano particles were prepared from agro waste (potato peel) by alkaline treatment, bleaching and acid hydrolysis. After each step, purity of CNP was confirmed by FTIR analysis. The yield of CNP was promising (39.8 +/- 0.5%). The morphology, size and nature of CNP was further confirmed by scanning electron microscopy, atomic force microscopy, transmission electron microscopy and X-ray diffraction analysis. The tensile strength and elongation property of CNP incorporated PVA increased significantly compared to CHNP incorporated PVA films and normal PVA film. Moreover, transparency and thermal stability of the CNP-PVA film was at par with that of synthetic film and better than other combinations. Similarly compared to normal PVA film, CNP and fennel seed oil incorporated PVA film surface exhibited enhanced antibacterial property and significantly high free radical scavenging activity. Biodegradability of the above packaging film was also proved experimentally. The oxygen transfer rate of the film was reduced significantly after incorporating CNP. Hence, CNP-PVA film can reduce oxidative degradation of food compared to normal PVA film. Therefore, the current study recommends CNP and fennel seed oil incorporated PVA film for food packaging.