In modern times, many antibiotics have become less effective as microorganisms develop resistance. Besides antibiotic resistance, another bacterial strategy that contributes to the capacity to withstand antimicrobials is biofilm formation. Because of these bacterial survival strategies, the desired response cannot be achieved with conventional treatment. Considering the limited discovery of new compounds, the most logical approach is to reconstruct existing antimicrobial molecules with nano-drug delivery systems. With this scientific approach, the aim of the study is to develop a novel nano-antibiotic hydrogel formulation containing silver nanoparticles, chitosan, and amoxicillin. Endodontic disease was used as a model of biofilm-mediated infection, and the antibacterial activity of nano-antibiotic hydrogel was evaluated with the E. faecalis standard bacterial strain. By adopting the Box-Behnken design for the optimisation of formulation variables, an innovative pharmaceutical formulation with antimicrobial and antibiofilm activity was successfully obtained. Further characterisation studies, including nanoparticle characterisation, in vitro cytotoxicity, and ex vivo activity studies, were carried out on dental samples using the optimised formulation. All results were compared with antimicrobial agents routinely used in endodontic treatment. The findings mainly conclude that the optimised nano-antibiotic hydrogel may be an alternative antimicrobial formulation since it is non-cytotoxic and exhibits high antibiofilm activity.