Sedimentation process (GLE‐S) or chloroform (GLE‐Ch) were used for dechlorophyllisation of ethanolic guava leaf extract (EGLE). EGLE without chlorophyll removal (GLE‐C) was served as control. Among all the extracts, GLE‐S had the lowest chlorophyll a, chlorophyll b, and total chlorophyll contents (P < 0.05). Extraction yield was highest in GLE‐C, followed by GLE‐S and GLE‐Ch, respectively. Total phenolic content and antioxidant properties were highest in GLE‐S (P < 0.05). When Pacific white shrimp (PWS) was pre‐treated with GLE‐S at varying doses (0.5% and 1%), lipid oxidation products were monitored as compared to the control (CON) and those pre‐treated with 1.25% sodium metabisulphite (SMS‐1.25) during refrigerated storage (4°C) for 12 days. Lower lipid oxidation was recorded for PWS pre‐treated with GLE‐S, especially at 1%. Therefore, sedimentation process, a green method, showed promising efficacy for producing EGLE free of green colour with improved antioxidant properties. The extract effectively reduced lipid oxidation in PWS during refrigerated storage.