Introduction: The global neonatal death rate was predicted to be 18 per 1000 live births during the first 28 days of life. Ethiopia continues to have one of the highest neonatal mortality rates in the world. Essentially, over 70% of these deaths may have been averted or prevented if proper essential newborn care had been provided. The purpose of this study was to assess the practice of essential newborn care and associated factors among obstetric care providers in public hospitals in Sidama regional state, Ethiopia. Methods: This study was conducted from 1 to 30 July 2020, using an institutionally based cross-sectional study design. The study comprised 182 obstetric care professionals from six hospitals chosen at random. EpiData (version 3.1) was used to enter data, which was then exported to SPSS (version 20). Descriptive, bivariable, and multivariable logistic regression were used. Statistical significance of the explanatory variables was declared at p values <0.05. Results: The overall prevalence of good practice on essential newborn care was 56.6% (95% confidence interval = 49.4–63.7). Working in the delivery room (adjusted odds ratio = 3.53, 95% confidence interval = 2.04–10.06), having training in essential newborn care (adjusted odds ratio = 3.65, 95% confidence interval = 1.63–8.17), and access to established essential newborn care protocols (adjusted odds ratio = 6.88, 95% confidence interval = 3.10–15.26) were found to be statistically significant factors of essential newborn care practice. Conclusion: The study found that having necessary newborn care standards, being interested in working in the delivery room, and having essential newborn care training are all important factors in implementing essential newborn care practices. Important knowledge gaps were noted in key areas of essential newborn care.