Background Birth injury is harm that a baby suffers during the entire birth process. It includes both birth asphyxia and birth trauma. In Ethiopia, birth injury has become the leading cause of neonatal morbidity and mortality, accounting around 28%-31.6% of neonatal mortality. The study aimed to assess the prevalence and factors associated with birth injuries among newborns delivered in public hospitals Addis Ababa, Ethiopia, 2021. Methods Institution based cross-sectional study was conducted from February 15th to April 20th, 2021 in selected public hospitals of Addis Ababa, Ethiopia. Random sampling and systematic random sampling were used. Data was entered by using Epi data version 4.0.2 and exported in to SPSS Software version 25 for analysis. Both bivariate and multivariable logistic regressions analyses were used. Finally P-value <0.05 was used to claim statistically significant. Result The prevalence of birth injury was 24.7%. In the final model, birth asphyxia was significantly associated with the short height of the mothers (AOR = 10.7, 95% CI: 3.59–32.4), intrapartal fetal distress (AOR = 4.74, 95% CI: 1.81–12.4), cord prolapse (AOR = 7.7. 95% CI: 1.45–34.0), tight nuchal cord (AOR = 9.2. 95% CI: 4.9–35.3), birth attended by residents (AOR = 0.19, 95% CI: 0.05–0.68), male sex (AOR = 3.84, 95% CI: 1.30–11.3) and low birth weight (AOR = 5.28, 95% CI: 1.58–17.6). Whereas, birth trauma was significantly associated with gestational diabetic mellitus (AOR = 5.01, 95% CI: 1.38–18.1), prolonged duration of labor (AOR = 3.74, 95% CI: 1.52–9.20), instrumental delivery (AOR = 10.6, 95% CI: 3.45–32.7) and night time birth (AOR = 4.82, 95% CI: 1.84–12.6). Conclusion The prevalence of birth injury among newborns has continued to increases and become life-threatening issue in the delivery and neonatal intensive care unit in the study area. Therefore, considering the prevailing factors, robust effort has to be made to optimize the quality obstetric care and follow up and emergency obstetrics team has to be strengthened to reduce the prevalence of birth injury.