Cysteine protease that plays a key role in autophagy by mediating both proteolytic activation and delipidation of ATG8 family proteins. The protease activity is required for proteolytic activation of ATG8 family proteins: cleaves the C-terminal amino acid of ATG8 proteins to reveal a C-terminal glycine (By similarity). Exposure of the glycine at the C-terminus is essential for ATG8 proteins conjugation to phosphatidylethanolamine (PE) and insertion to membranes, which is necessary for autophagy. In addition to the protease activity, also mediates delipidation of PE-conjugated ATG8 proteins (By similarity). [protein]-C-terminal L-amino acid-glycyl-phosphatidylethanolamide + H2O = [protein]-C-terminal L-amino acid-glycine + a 1,2-diacyl-sn-glycero-3-phosphoethanolamine Interacts with ATG8. Constitutively expressed. Belongs to the peptidase C54 family.