Packaging plastic is the largest contributor to plastic pollution in the environment. Nowadays, the development of environmentally friendly packaging materials is a necessity. Cellulose is a naturally occurred polymer that has potential as raw material to manufacture environmentally friendly packaging. Cellulose is the most abundant natural polymer in the world which also renewable. Cellulose has excellent tensile strength, good water resistance and is biodegradable. One of the problems on the utilization of cellulose as environmentally friendly packaging that it is brittle and difficult to process. Starch is another natural polymer which also considered as suitable material to manufacture environmentally packaging material. Starch is easier to process into plastic material but has lower mechanical and water resistance properties than cellulose. In this study we combine cellulose and starch to form a bio-composite film, with glycerol to increase processability and flexibility to produce an environmentally friendly packaging material with the desired properties. In this research, Cladophora Algae was used as source of cellulose in this study. Cellulose extracted from Cladophora algae is having excellent mechanical properties compared from the other sources. The result showed that the bio-composite shows excellent tensile strength and water resistance, with optimal strength and water resistance obtained 80.16 MPa in 70% starch content and 5.83% mass loss at 60% starch respectively. Flexibility has increased, with the highest elongation at 12,7%. These results indicate that cellulose-starch bio-composite are promising to be developed as green sustainable packaging materials