he aims of the present work is to introduce a mechanical sugarcane buds separation system for purpose of nursery planting. In current study, the machine was designed, fabricated and tested laboratory at the Agricultural Engineering Research Institute (AENRI), Giza. The field test was conducted in Elmatana Research Station, Luxor Governorate. The machine was developed to cut the cane buds with an adequate part of root band to secure strong germination.  The machine used to separate the bud from the cane stalk and leave the stalk for industrial process. The mechanical system consisted of the developed unit that powered by the compressed air provided by an air compressor at a pressure of 10 bar. A pneumatic cylinder pushes a special punch that separates the buds of the cane stalk. The physical and mechanical properties that related to cutting the sugar cane buds were measured. Average production of the machine under the conditions of the test was about 1056 buds/h. Buds sizes were classified according to the part of stalk diameter cut by the punch. The cuts were determined approximately as 1/4, 1/2, and 3/4 of the stalk diameter, and the results showed a high vitality of the seedlings resulting from the separation of buds with this machine. Experiments in the nursery showed that the planting of the buds separated by using this machine gave a high germination percent. Bud chips germination significantly improved after treatment with fungicide (Rizolex-T 50%) for 5 minutes, compared with untreated treatment. Transplanting the healthy seedlings in the permanent field gave high cane yield (60.96 t/fed), which was 10.96% higher than that of conventionally planted cane crop (54.94 t/fed). it also produced higher tiller /clump (11), some millable canes /clump (7) and several millable canes /fed (59.56 thousand/fed) with survival (96.17%). This improved also higher stalk length (262.75 cm), diameter (2.8 cm) and weight (1.28 kg).