Selenium (Se) is in great demand as a health supplement due to its superior reactivity and excellent bioavailability, despite selenium nanoparticles (SeNPs) having signs of minor toxicity. At present, the efficiency of preparing SeNPs using lactic acid bacteria is unsatisfactory. Therefore, a probiotic bacterial strain that is highly efficient at converting selenite to elemental selenium is needed. In our work, four selenite-reducing bacteria were isolated from soil samples. Strain LAB-Se2, identified as Pediococcus acidilactici DSM20284, had a reduction rate of up to 98% at ambient temperature. This strain could reduce 100 mg L⁻¹ of selenite to elemental Se within 48 h at pH 4.5–6.0, a temperature of 30–40 °C, and a salinity of 1.0–6.5%. The produced SeNPs were purified, freeze-dried, and subsequently systematically characterised using FTIR, DSL, SEM-EDS, and TEM techniques. SEM-EDS analysis proved the presence of selenium as the foremost constituent of SeNPs. The strain was able to form spherical SeNPs, as determined by TEM. In addition, DLS analysis confirmed that SeNPs were negatively charged (−26.9 mV) with an average particle size of 239.6 nm. FTIR analysis of the SeNPs indicated proteins and polysaccharides as capping agents on the SeNPs. The SeNPs synthesised by P. acidilactici showed remarkable antibacterial activity against E. coli, B. subtilis, S. aureus, and K. pneumoniae with inhibition zones of 17.5 mm, 13.4 mm, 27.9 mm, and 16.2 mm, respectively; they also showed varied MIC values in the range of 15–120 μg mL⁻¹. The DPPH, ABTS, and hydroxyl, and superoxide scavenging activities of the SeNPs were 70.3%, 72.8%, 95.2%, and 85.7%, respectively. The SeNPs synthesised by the probiotic Lactococcus lactis have the potential for safe use in biomedical and nutritional applications.