The environmental impact of non-degradable single-use plastics poses a significant challenge to current sustainability efforts. To foster a sustainable circular economy, this study introduces grass biomass as a renewable resource for the production of innovative bioplastics. The research involves the direct conversion of grass waste into composite bioplastics through alkaline hydrolysis, offering a transformative approach to plastic manufacturing. The hydrolysis process was optimized by varying treatment times and alkaline concentrations, with the ideal conditions identified as 1 M NH3 and 24 hours of treatment. Subsequently, the incorporation of ε-polylysine (PL) enhanced the mechanical properties of the bioplastics by acting as a plasticizer. Mechanical testing revealed that samples containing 10% and 20% PL exhibited comparable rigidity, with a Young's modulus of approximately 700 MPa and a tensile strength of 10 MPa. Moreover, the addition of PL, up to 20%, significantly improved the water resistance of the bioplastics, evidenced by decreased moisture content and water solubility. Additionally, the bioplastics demonstrated effective antimicrobial activity against Escherichia coli and Staphylococcus aureus, as well as significant antioxidant activity. Life cycle assessment (LCA) and life cycle costing (LCAA) results demonstrate the potential environmental benefits of manufacturing grass biomass into plastic films, with a significant reduction in greenhouse gases, cumulative energy demand (CED), and cost when compared to benchmark packaging plastics. These promising properties indicate that these biomaterials could be effectively utilized in real-world applications, with potential application as sustainable biobased packaging materials.