Paper‐based packaging can offer a sustainable replacement for plastics. However, paper provides a poor barrier to water, oxygen and moisture. This study presents a novel renewable lignocellulosic composite made from a hydrophobic photo‐reversible coating deposited onto a cellulose nanofiber film that has improved barrier properties and can be reprocessed. Diglycerol and lignin‐derivable aldehyde were reacted to form a tetra‐functional monomer with photo‐responsive unsaturated double bonds that can be converted to covalent cyclobutane rings to create reversibly crosslinkable network upon UV‐irradiation. The photo‐responsive compound was applied as a thin coating of thickness 2.7±0.4 μm over cellulose nanofiber (CNF) films of thickness 80±19 μm. The surface of the coated films became hydrophobic with a contact angle (CA) of 93.1±1.7° and displayed a low water vapour transmission rate (WVTR) of 16±2 g/m2/day vs. 30.7±1.5° CA and 81±11 g/m2/day WVTR for uncoated CNF films. The coated film is also oleophobic, an attractive feature for food packaging applications. The reversible photo‐reaction enables the crosslinked covalent network to be broken down to unsaturated double bonds once exposed to a higher‐energy UV irradiation, allowing reprocessing and recycling. The novel coating was developed using a sustainable green synthesis method (process simple E factor 0.9).