In Amhara Region, the number of irrigation projects is increasing from time to time. However, it becomes difficult to complete projects within the allocated cost. Completing projects with the allocated project cost by avoiding or minimizing cost overrun of irrigation projects in Amhara Region is the expected contribution of this research. For the purpose of this research cost overrun is defined as actual costs minus estimated costs in percent of estimated costs. The methodology is a combination of literature review, questionnaires, and desk study. Besides project document study, both close ended and open-ended questionnaires were designed for the three main parties (clients, consultants and contractors) by raising questions focused on causes of cost overrun and its effects on irrigation projects. Both descriptive and inferential statistics are applied in the data analysis; in combination with Microsoft Office Excel. Based on the overall ranking of the research outcome, the findings show that inadequate site investigation, inaccurate cost estimation (underestimation), frequent design changes are ranked as the first three most severe causes with severity index of 0.63, 0.59 and 0.52 respectively. The lowest bidding procurement method, errors and omissions in design, incomplete design drawings and specifications at tendering stage are ranked equally as the fourth severe causes with frequency index of 0.47. Moreover, delay on completion time, dispute among parties, delayed payment to contractors, distorts fair and equitable resource distribution, additional cost and budget short fall are the main (top five) effects of cost overrun as perceived by the respondents. Hence, it is possible to conclude that five of the top six cost overrun factors are rooted from study and design phase of irrigation projects. Hence, more attention should be given for design phase as this phase is the key for the whole process of avoiding or minimizing cost overrun.