Abstract: Concrete is the most popular construction material worldwide. In Ethiopia, concrete productions with conventional building materials are widely used. Conventional concrete is one of the main reason in increasing the weight of the buildings, larger volume comprises of coarse aggregates conventional aggregate is heavy and costly, seeking alternative sustainable aggregate. Lightweight aggregate is receiving more attention now, since, it offers the required concrete density, cost-saving and increase the thermal insulation. In addition to that the manufacturing of cement leads to the release of a significant amount of carbon dioxide, high power consumption and health effects. In order to address all effects associated with cement production, there is a need to develop an alternative way of replacing cement by utilizing industrial waste. Since, Ethiopia is one of the countries that have large coal reserves which is about 500 million tons at different categories, its byproduct fly ash looks to be a promising supplementary cementitious material for cement concrete. Fly ash used as Portland cement that helps in more sustainable cement production by lowering energy and raw material consumption. Also, large area of land required for disposal and toxicity associated with heavy metal led to increased environmental concern of fly ash. Combined effect of ambo stone as coarse aggregate and fly ash as cement on mechanical properties of concrete are experimentally investigated for replacement ratios of 25, 50, 75 and 100% ambo stone by weight of Coarse aggregate with 15% fly ash by weight of cement were used. The physical and chemical properties of fly ash were characterized. The mechanical properties of the concrete are investigated through a compressive strength test, splitting tensile strength test and flexural strength test. The research result revealed that the work ability of concrete has increased in the addition of fly ash. From XRD and SEM result the fly ash is mainly amorphous material and spherical in shape, respectively. Compressive strength of concrete has shown an increment at 25% replacement by 9.59 and 50% replacement by 7.47% of ambo stone with 15% of fly ash on 28th day also splitting tensile strength and flexural strength has shown an increment at 25 and 50% replacement on 28th day. The optimum cement replacement level for fly ash and ambo stone was 15 and 25% by weight of cement and coarse aggregate, respectively. The utilization of fly ash in the construction industry can compensate for environmental, technical and economic issues caused by cement production.