The cost-effective production of commercially important biopolymers, such as chitosan, has gained momentum in recent decades owing to its versatile material properties. The seasonal variability in the availability of crustacean waste and fish waste, routinely used for chitosan extraction, has triggered a focus on fungal chitosan as a sustainable alternative. This study demonstrates a cost-effective strategy for cultivating an endophytic fungus isolated from Pichavaram mangrove soil in a pineapple peel-based medium for harvesting fungal biomass. Chitosan was extracted using alkali and acid treatment methods from various combinations of media. The highest chitosan yield (139 ± 0.25 mg/L) was obtained from the pineapple peel waste-derived medium supplemented with peptone. The extracted polymer was characterized by FTIR, XRD, DSC, and TGA analysis. The antioxidant activity of the fungal chitosan was evaluated using DPPH assay and showed an IC₅₀ value of 0.22 mg/L. Subsequently, a transparent chitosan film was fabricated using the extracted fungal chitosan, and its biodegradability was assessed using a soil burial test for 50 days. Biodegradation tests revealed that, after 50 days, a degradation rate of 28.92 ± 0.75% (w/w) was recorded. Thus, this study emphasizes a cost-effective strategy for the production of biopolymers with significant antioxidant activity, which may have promising applications in food packaging if additional investigations are carried out in the future.