A novel antibacterial paper coated with chitosan-based silver (Ag) nanocomposite prepared by green synthesis has been investigated for a wide range of application in food, agricultural and medical packaging. Green synthesis of Ag nanoparticles (AgNPs) was carried out by a chemical reaction involving a mixture of chitosan-silver nitrate (AgNO3) in an autoclave at 15 psi, $121^{circ}C$, for 15-120 sec. AgNPs and their formation in chitosan were confirmed by both UV-Vis spectroscopy and transmission electron microscope (TEM). Fourier transform infrared spectroscopy (FTIR) study showed that free amino groups in chitosan act as an effective reductant and AgNPs stabilizer. Antibacterial test of coated paper with as-prepared chitosan-AgNPs was performed qualitatively against E. coli based on the formation of halo zones around coated papers and it was shown to be effective in suppressing the growth of E. coli with increasing Ag contents in coating layer.