The change in river morphology in river systems is described by river bank erosion, river bed level change and lateral channel change. The alluvial river channels in Lake Tana sub basin in the upper Blue Nile basin have been disturbed by natural and human-induced factors. This paper examines stream bank erosion and sedimentation of the Megech River which drains towards Lake Tana and then to the Blue Nile. Soil samples at the banks and bed of the river were collected and analyzed. River cross sections have been surveyed for about 10 km starting from the newly constructed Megech Embankment Dam. Stream flow and climatological data have been collected from Ministry of Water, Irrigation and Energy and National Metrology Agency. Using HEC-RAS and BSTEM models, the collected data have been analyzed and simulated. The simulated result has been analyzed by dividing total study reaches into three sub –reaches as upper, middle and lower reaches. The result shows that sediment was accumulated in some location and degraded in another location for the past ten years. The upper reach average bed change was found to be aggradation while the middle and lower reaches show that there is small amount of degradation. For the studied River reach, when looked in general, the average mass bed change was found to be 2.031 ton/day (aggradation). The average River bed invert level change was found to be 0.289 m which indicates again deposition or aggradation. There was on average 41.696 ton/day sediment discharge found for the whole study reach and from which 14.415ton/day was contributed from the banks of the river. The general trend of river bank stability shows that 76% of right bank is stable and 24% is unstable while the left bank is 35% stable and 65% is unstable. In general, even though higher record is observed at some location and at high flow season, the Megech River bed change and bank erosion as compared to sediment discharge found to be on average small from year to year and from location to location. But the sediment discharge is higher according to the simulation result and this needs action to minimize Lake Tana and Megech reservoir sedimentation. Hence, an integrated river catchment management and river bank stabilization work has to be in place to minimize sediment discharge and bank erosion.