Oligosaccharides (OS) are considered as functional food and prebiotics. They employed in food, feed, pharmaceutical and agricultural applications as well as used as cosmetics and immune-stimulating agents. Oligosaccharides may be isolated from natural sources or chemically synthesized, but the prices are high. An alternative approach to oligosaccharide synthesis is to use microbial production. The high cost of OS production is the major restriction in the industrial production. So, this study was aimed to produce OS by Leuconostoc holzaapfeliistrain S7 using sugar cane molasses as low cost fermentation medium. The yields of OS by this bacterial strain reached to 21.55, 28.82, 37.35, 44.23and 30.93gl^-1when used sugar cane molasses at concentrations of 130, 160, 200, 262 and 290 gl^-1, respectively, comparing with 64.80 gl^-1 OS formed by the same strain grown on modified sodium gluconate medium at 7 pH fortified by 80 gl^-1sucrose and 5gl^-1 of a mixture of equal weight of each of yeast extract, peptone & beef extract, incubated at 25°C for 72 hours. Chemical characterization of the obtained OS was achieved using Fourier Transform-Infra-Red spectroscopy (FT-IR) and Liquid Chromatography-Mass Spectrometric (LC-MS).Also, their melting point and monosaccharaides content in extracted product were determined. It could be concluded that sugar cane molasses used in the current study was suitable as low cost medium for production of OS by the tested bacterial strain with considerable yield level.