Saffron can be infected with pathogenic fungi that cause corm rot as it grows and multiplies, which can reduce the quality and yield of saffron. Corm rot has become one of the most serious diseases of saffron. In this study, rhizosphere bacteria were isolated from saffron rhizosphere soil, and bacteria exhibiting antagonistic effects against corm rot pathogenic fungi were screened using in vitro plate co-culture assays and dual-compartment agar plate systems. Selected strains were further evaluated for hydrolase activity determination and PGP potential assessment. Among them, Bacillus velezensis showed the best disease resistance activity. The degradative enzyme production and some beneficial characteristics of Bacillus velezensis for plant growth promotion were evaluated. It was found that Bacillus velezensis possesses nitrogen fixing, NH3-producing, IAA production, and ACC-deaminating enzymes. The whole genome sequence of this strain was annotated and analyzed. The genome of Bacillus velezensis consists of a circular chromosome of 3,908,025 bp base pairs, with a guanine and cytosine content of 46.64%. There are 3737 protein-coding genes, including 86 tRNA genes, 27 rRNA genes, and 85 sRNA genes. The genome also contains four genomic islands, two pre-phages, and one transposon. The prediction of the secondary metabolic accumulation gene cluster demonstrated that the genome sequence of ZGE166 encodes 12 gene clusters involved in the synthesis of secondary metabolites, including macrolactin H, bacillaene, fengycin, difficidin, and bacillibactin. In summary, strain ZGE166 Bacillus velezensis has the potential to be developed as a biological agent.