The generation of MSW in urban areas in Ethiopia and elsewhere continues to increase and poses a challenge to city governments and citizens if the wastes are not properly managed. Applying an integrated system for managing MSW and recovering the material for use in new products can reduce the negative impacts on the environment. The purpose of this study is to apply the DPSIRO framework to develop a system that reduces the negative impacts of MSW in Bahir Dar city in a sustainable way. The research started by identifying the main driving forces that lead to the generation of MSW. Then, states because of pressures and the consequent impacts were investigated. Finally, the appropriate responses and outcomes obtained from the responses were dealt with. Methods used to quantify GHG emissions, leachate, and eutrophication potential were applied. According to the findings, the waste disposal site emits an estimated 46Gg of greenhouse gases per year in 2020.The eutrophication capacity of organic waste generated in the city was 0.0594 Kg N-equivalent or 59.4g N-equivalent. The waste also contains an average of 1,112mm of leachate per day on an annual basis. The state of the environment has an impact on human health and the ecosystem. Applying the circular economic system, knowledge transfer, and waste management fees are the main responses suggested to decision and policy makers. The responses correspond with balanced economic, social and environmental situations. Outcomes were quantified in terms of organic fertilizer, income and renewable energy (briquette) when the actions were taken.