Agriculture is the leading sector in the Ethiopian economy, which contributes about 44 percent of the total GDP as compared to 14 percent from industry and 42 percent from services. Although it is still the dominant sector, most of Ethiopia’s cultivated land is under rainfed agriculture, and only 7.5 percent of irrigable areas are under irrigation schemes. The objectives of this study were to: (1) identify where and quantify highly suitable areas for irrigation schemes and rainfed and analyze the gaps with the existing areas for irrigation & rainfed, (2) identify development potentials for both irrigation and rainfed scenarios by using determining factors affecting their potential, (3) draw the attention and provide a better guide for investment decisions that would enhance national & regional development potential in boosting agricultural production and productivity in Ethiopia. Regarding land suitability, different input datasets were analyzed and suitable areas were identified for irrigation and rainfed agriculture. Some common variables were used to identify land suitability of both scenarios (irrigation and rainfed) including agroecology, slope classes, land use land cover types, road networks, soil types, and districts and town populations. Whereas rainfall and rainfall variability were additional inputs for rainfed agriculture but the river and river flow rates were used as additional inputs for land suitability for irrigable areas. Furthermore, five major factors were identified to model development potential options for rainfed and irrigations scenarios, which are (1) land suitability, (2) agroecology, (3) population density, (4) market access, and (5) length of growing periods. These