In semiconductor industry, reusability-based System-on-Chip architecture using hardware intellectual property (IP) cores play a prominent role in Internet-of-Things (IoT) applications for secure data transmission. The advent of IoT makes it possible for physical things to transmit, process, compute, and receive data over internet. But, it also introduces in-device communication security vulnerabilities. Advanced Encryption Standard (AES) IP has been used to address security vulnerabilities in IoT. It is an efficient and high-performance crypto algorithm used in IoT devices for secure and fast data encryption. However, due to rise of many attacks, the security of AES IP is also under threat. Hardware obfuscation is one such prominent countermeasure that mitigates hardware attacks such as tampering, reverse engineering, and malicious alteration. This article presents secure AES IP mechanism using the potential technique of obfuscation inspired by the concept of combinational hardware Trojan. Experimental results show that the proposed technique is resilient against reverse-engineering, malicious alteration, Boolean satisfiability attack, and key-sensitizing attacks. The confusion and diffusion features of obfuscated AES IP are higher in terms of Hamming distance, avalanche effect, and balance rate. The proposed technique is implemented in Basys-3 FPGAs within 5% of power and area overhead while maintaining high throughput.