In the present study, we report the gamma (γ) ray irradiation-induced structural, optical, luminescence and radiation shielding properties of Er3+-doped Li2O-Bi2O3-B2O3-TeO2 glasses prepared by melt-quenching technique. It was evidence of the slight reductions in density and refractive index while maintaining stable optical properties upon the γ irradiation. Additionally, increased molar volume and polarizability indicated a less compact network. Raman spectroscopy shows broadened peaks and intensity reductions at key vibrational modes. The UV-Vis-NIR absorption spectra reveal the shift in the absorption edge and reduction in the intensities of Er³⁺ absorption bands (around 450, 520, 550, and 650 nm) with higher radiation doses, indicating radiation-induced damage. It was found that the band gap values decreased from 2.58 eV to 1.30 eV for un-irradiated glass to 90 kGy irradiated glass, and Urbach energy was found to increase from 0.18 to 1 eV respectively, indicating structural disorder and localized states within the band gap. PL emission spectra demonstrated intensity changes and peak shifts with γ radiation dose while maintaining a dominant green emission from 4S3/2 → 4I15/2 and 2H11/2 → 4I15/2 transitions, supported by the CIE diagram analysis. The NIR emission spectra also displayed a peak at 1530 nm with decreasing intensity, indicating defect-induced non-radiative recombination centres. Luminescence lifetime decay profiles indicated reduced lifetimes at higher γ doses, suggesting introduced non-radiative decay pathways. Furthermore, Phy-X software analysis highlighted effective γ-ray shielding influenced by chemical composition and photon flux, with MAC sharply decreasing to 1.8 cm2/g at 0.1 MeV and stabilizing, while LAC showed reduced attenuation efficiency at higher energies. HVL and TVL increased with energy, stabilizing around 4-5 cm and 15-16 cm, respectively, necessitating thicker materials for effective shielding at higher photon energies. MFP rapidly increased to 6-7 cm at 2 MeV, stabilizing at higher energies, while Zeff decreased sharply before stabilizing around 1 MeV. The EBF and EABF trends exhibited higher values at low energies, stabilizing at higher energies, indicating effective photon interaction and resonance effects.