The research in eco-friendly and sustainable materials for packaging applications with enhanced barrier, thermo-mechanical, rheological and anti-bacterial properties has accelerated in the last decade. Last decade has witnessed immense interest in employing nanocellulose (NC) as a sustainable and biodegradable alternative to the current synthetic packaging barrier films. This review article gathers the research information on NC as a choice for food packaging material. It reviews on the employment of NC and its various forms including its chemico-physical treatments into bio/polymers and its impact on the performance of nanocomposites for food packaging application. The review reveals the fact that the research trends towards NC based materials are quite promising for Active Packaging (AP) applications, including the Controlled Release Packaging (CRP) and Responsive Packaging (RP). Finally, it summarizes with the challenges of sustainable packaging, gray areas that need an improvement/focus in order to commercially exploit this wonderful material for packaging application.