Knowledge Management plays an important role especially in project based organization to help them accomplish their mission effectively. However, project knowledge is manually managed at Addis Ababa Science and technology Agency /AASTA/, a project based government organization under the Addis Ababa city administration. As a result, the project related knowledge is not easily available, accessible and usable by the stakeholders. The general objective of the research, thus, is to explore factors hindering effective management of project based knowledge and then propose a project knowledge management system to improve the practice of using project knowledge within the organization in order to increase chances of project success. rnA case study research strategy is adopted considering AASTA as a case. Data was collected using questionnaire, and document review. This strategy helped to identify AASTAâ€™s current project management practice with the areas of possible improvement. Subsequently a project knowledge management system is designed based on design science research methodology (which integrates problem identification, objective, design, demonstration, evaluation). rnThis study has significant implications for the AASTA and other stakeholders. It has identified and analyzed the causes and impacts of poor management of project knowledge. The study also indicated that top management, project managers, team leaders and project team members should consider using previous project knowledge. Finally, a project knowledge management system framework is proposed for AASTA in order to mitigate the problem. Then a prototype is proposed to demonstrate the proposed project knowledge management system with components of the framework. rnThe study findings are not generalizable to other contexts. It is because that this study is a qualitative type of research and only focused on the AASTA context. The study recommends a framework and prototype for the concerned bodies of AASTA which must be implemented for effective management of project knowledge and also validated the prototype by different experts in the works at directorate, team leader and expert level, and obtain positive feedbacks. The study also recommended to the need to conduct further study in the area of project knowledge management on the public sectors with in Addis Ababa City Government.