The fabrication of copper nanoparticles (CuNPs) with smallest size and more stability, with potential effects in plant diseases management, may need a modified protocol for green synthesis. In this study, we could biosynthesize stable CuNPs extracellularly by an eco-friendly route using A. versicolor. The biosynthesis of nanoparticles was confirmed by UV–visible spectroscopy, Fourier transform infrared (FTIR), transmission electron microscope (TEM) and dynamic light scattering (DLS) techniques. CuNPs have a size range of 23–82 nm with round to polygonal shape. Antifungal study showed that CuNPs have potential antifungal activity against rotting plant pathogens, where 3.2 and 2.8 μg ml−1 of nanoparticle solution totally inhibited the growth of both Fusarium oxysporum and Phytophthora parasitica, respectively. Damaged hyphae with limited deformed spores were detected through scanning electron microscope (SEM) analysis after the treatment of both pathogens with CuNPs. Between all tested polymers, gelatin-encapsulated nanoparticles were characterized ‘by their smallest size, 7–33 nm, and regular spherical shape at all experimental conditions. After 6 months of storage, gelatin-CuNPs maintained full nanoscale and antifungal properties compared with uncoated particles which lost these properties after only 1 month. It is concluded that CuNPs can be biosynthesized by an eco-friendly cheap method using A. versicolor and can be preserved stably for a long time with the smallest size and full antifungal activity by their encapsulation with gelatin as a natural polymer. These nanoparticles can be used safely in the management of plant rotting fungi.