SARS-CoV-2 is a new strain of Coronavirus that caused the pneumonia outbreak in Wuhan, China and has spread to over 200 countries of the world. It has received worldwide attention due to its virulence and high rate of infection. So far, several drugs have experimented against SARS-CoV-2, but the failure of these drugs to specifically interact with the viral protease necessitates urgent measure to boost up researches for the development of effective therapeutics against SARS-CoV-2. Papain-like protease (PLpro) of the viral polyproteins is essential for maturation and infectivity of the virus, making it one of the prime targets explored for SARS-CoV-2 drug design. This study was conducted to evaluate the efficacy of ~ 50,000 natural compounds retrieved from IBS database against COVID-19 PLpro using computer-aided drug design. Based on molecular dock scores, molecular interaction with active catalytic residues and molecular dynamics (MD) simulations studies, STOCK1N-69160 [(S)-2-((R)-4-((R)-2-amino-3-methylbutanamido)-3-(4-chlorophenyl) butanamido) propanoic acid hydrochloride] has been proposed as a novel inhibitor against COVID-19 PLpro. It demonstrated favourable docking score, the free energy of binding, interacted with key amino acid residues necessary for PLpro inhibition and also showed significant moderation for parameters investigated for ADME/tox (Adsorption, distribution, metabolism, excretion and toxicological) properties. The edge of the compound was further established by its stability in MD simulation conducted for 30 ns employing GROMACS software. We propose that STOCK1N-69160 is worth further investigation for preventing SARS-CoV-2.