Lignocellulosic wastes have the ability to be transformed into oligosaccharides and other value-added products. The synthesis of oligosaccharides from renewable sources bestow to growing bioeconomies. Oligosaccharides are synthesized chemically or biologically from agricultural residues. These oligosaccharides are functional food supplements that have a positive impact on humans and livestock. Non-digestible oligosaccharides, refered as prebiotics are beneficial for the colonic microbiota inhabiting the f the digestive system. These microbiota plays a crucial role in stimulating the host immune system and other physiological responses. The commonly known prebiotics, galactooligosaccharides (GOS), xylooligosaccharides (XOS), fructooligosaccharides (FOS), mannanooligosaccharides (MOS), and isomaltooligosaccharides (IOS) are synthesized either through enzymatic or whole cell-mediated approaches using natural or agricultural waste substrates. This review focusses on recent advancements in biological processes, for the synthesis of oligosaccharides using renewable resources (lignocellulosic substrates) for sustainable circular bioeconomy. The work also addresses the limitations associated with the processes and commercialization of the products.