Now a day, a number of sugar factories in Ethiopia are increasing; however, plantation process in all factories is the same and conventional. In conventional method, large mass of planting material poses a great problem in transport, handling and storage of seed cane. To minimize the above problems of planting material, the new method popularly known as bud chipping have to be used. This thesis work was experimental and as the name implies, it aims to design, fabricate and adapt sugarcane internode cutting and bud chipper machine for plantation purpose. The designed and fabricated machine operates in both motor powered and manual systems when there is no electric power. The design and analysis of each component was done mathematically and the result was crosschecked by simulation of much stressed components with software called ANSYS. The design analysis and the simulation result shows that the design was safe. The thesis paper includes the part and assembly drawings, assembling procedures, manufacturing process, maintenance methods and working principles. The sugarcane internode cutting and bud chipper machine was designed and fabricated with 1010 HR steel materials and used several workshop machines (i.e. welding, drilling, milling, lathe and etc.) to be fabricated. It is affordable for every sugar factories and the cost was 13,900 Birr. The machine was tested for both manual and motor powered systems. During the testing period the samples were taken randomly. The machine have a capacity of cutting 1200 and 200 buds/ hour in motor powered and manual systems respectively. This test result shows that the machine was capable of preparing buds efficiently. These bud chips are less bulky, easily transportable and more economical seed material. The left-over cane can be well utilized for preparation of sugar.