<p>Aerogels are extremely light, possessing low density and thermal insulation properties. Owing to the exceptional properties, they have garnered substantial attention in the food packaging industry. Aerogels produced from various renewable sources and waste-derived resources have earned tremendous value due to their efficient biodegradability and low environmental footprint, which judiciously support the concept of circular economy through biomass valorization and align with the key Sustainable Development Goals. The review provides a thorough overview of various materials used for the aerogel-based active and intelligent packaging systems and their application for shelf-life extension. The review includes detailed information on the aerogel chemistry, its formulation and the advantages of using aerogels in various food packaging. The aerogel formulation is classically carried out via the Sol–gel process, which comprises steps such as mixing precursors, hydrolysis, polycondensation, gelation, ageing, and drying. Among all the steps, drying of gel is a significant step that governs several properties of aerogel. Based on materials used in the fabrication process, bio-based aerogels are gaining tremendous momentum in the food packaging industry due to their unique properties. They can act both as active as well as innovative packaging material by absorbing moisture, providing insulation, releasing antimicrobial agents, and also visually demonstrating food freshness by altering the color of the packaging system in response to spoilage gases such as ammonia. This combination of various functions extends shelf life, supports food safety monitoring, and serves as an environmentally friendly alternative to conventional packaging.</p>