In this work, the PVA-chitosan composite packaging films doped with biomass-fabricated zinc oxide nanoparticles (ZnO NPs) and dragon fruit waste extract (DFE) were developed for potential use in food packaging applications. ZnO NPs were synthesized using a sustainable method employing C. sinensis waste extract as a reducing agent. Chitosan and PVA were blended in a specific ratio (1: 1 w/w) to obtain a film-forming solution, into which the ZnO NPs and dragon fruit waste extract were incorporated. The resulting solution was cast into films, which were characterized using various analytical techniques. Mechanical properties, water solubility, and thermal stability of the films were also evaluated. The results demonstrated that the incorporation of green ZnO NPs and dragon fruit waste extract enhanced the mechanical strength and thermal stability of the films while reducing water vapor permeability. Moreover, the films exhibited biocidal and excellent 2,2-diphenyl-1-picrylhydrazyl (DPPH) scavenging properties, indicating their use in the food packaging sector. The production of these films offers a practical approach to produce bioactive food packaging materials. The use of plant extract and waste material as reducing agents can reduce the overall cost of production while providing added benefits, such as antioxidant and antibacterial properties.