The packaging will be available for a limited duration for its four-finger bar in Australia, across Western Australia, South Australia and the Northern Territory.
It has added a QR on the pack as it seeks to gather feedback on the new initiative from consumers.
Packaging experts at Nestlé's confectionery research and development centre in York, UK adapted and tested the paper while scaling it up for use on modified high-speed flow wrapping equipment, the company noted.
'Alternative Packaging Solutions'
Louise Barrett, head of the Nestlé Confectionery Product Technology Centre in York, said, "We are exploring different types of alternative packaging solutions for our confectionary products. For KitKat, the challenge was to find the right paper packaging solution with a high level of barrier properties to adequately protect the chocolate.
"We had to maintain the perfect balance between the iconic crispy wafer and smooth chocolate that people know and love, while at the same time ensuring the packaging is recyclable in the paper stream."
Nestlé has described the move as 'another positive step' in the company's efforts to use innovation to meet its packaging goals.
The company has pledged to reduce the use of virgin plastics by a third by 2025.
Other measures implemented by it include the rollout of recyclable paper wrappers for Quality Street last year, and recyclable paper packaging for all confectionery products sold under the Smarties brand.