Passive energy damper systems have been considered as efficient and practical method to improve seismic behaviour of structures under lateral loads including seismic. In this study, a new passive steel damping system with shear mechanism fuse was introduced and design procedures, recommended equations, parametric and analytical studies on this novel system were provided for strengthening and retrofitting purposes of reinforced concrete moment frames. Finite element modelling of the flexural behaviour, shear and axial failures of the concrete and steel members were conducted by fiber model techniques. Nonlinear analysis was conducted to evaluate the seismic performance, hysteresis response and stability, controlled damage and guided yielding, stiffness and ultimate strength, ductility and energy dissipation of this system were evaluated and compared with the moment frame. Analytical results explained that proposed damping system improved seismic performance of reinforced concrete moment frame, while increased stiffness, strength, energy dissipation by increasing damping in non-linear phase and ductility of structure at the same time. This proposed damping system can be easily replaced after severe earthquakes when it was damaged. This study seeks to promote using this damping system because of its ease of construction, availability, affordability, and economical aspect as well as its seismic performance.