The present study reports the optimization of a green method for the synthesis of silver nanoparticles (AgNPs) via reduction of Ag ions using cell-free supernatant of mutant Bacillus licheniformis M09. UV-Visible spectroscopy showing an absorption peak at ~ 430 nm confirmed the synthesis of AgNPs. Transmission electron microscope (TEM) analysis exhibited spherical AgNPs within the size range of 10-30 nm. Fourier transform infrared (FTIR) measurements assured the presence of effective functional molecules which could be responsible for stabilizing the AgNPs. X-ray diffraction (XRD) pattern verified the crystalline nature of AgNPs. Furthermore, the synthesized AgNPs showed an excellent photocatalytic degradation of methylene blue dye in less than 3 h under visible light proving their potential as a catalytic agent for bioremediation for next-generation dye degradation in effluent treatment. The AgNPs demonstrated antimicrobial activity against Gram-positive and Gram-negative foodborne pathogens which endorsed its suitability as agents to extend shelf-life in food packaging and food safety applications. The results also revealed a strong concentration-dependent cytotoxicity of AgNPs against human breast adenocarcinoma cells (MCF-7), while 15.07 µg/mL of IC was attained. The outcome suggests the possible application of these AgNPs in nanomedicine formulations. Thus, these findings propose promising ways for the valorization of the waste fermentation supernatant left after cell harvesting and desired metabolite extraction.