The COVID-19 epidemic’s ongoing effects on the conflicted, disturbed environment tend to exacerbate mental health issues. People from areas afflicted by conflict are put under double stress as a result. The majority of displacement due to conflict has occurred in Ethiopia. Mental disturbance among those affected by conflict has been recognized as a significant public health issue. Therefore, this study’s objective was to assess how the COVID-19 outbreak in Ethiopia’s conflict-affected population affected people’s mental health and its correlates. Mental distress was reported at about 49.4% with a 95% CI of 47 to 52.9%. Being female gender (AOR = 3.01, 95% CI 1.61, 5.44), fired house materials when present (AOR = 3.49, 95% CI 1.61, 5.44), Living in a host community (AOR = 1.8, 95%CI 1.97, 3.35), living alone (AOR = 3.57, 95%CI 2.06, 6.19), and sexual assault (AOR = 4.1, 95% CI 2.37 to 6.94) were found to be substantially correlated. Conflict-affected people have a high risk of mental distress during COVID-19 era. Therefore, the ministry of health and humanitarian organizations should work collaboratively in providing consistent; psychosocial support and appropriate intervention for conflict-affected people.