Powder metallurgy materials, which are widely utilized in various sectors, have led to the development of green machining. Green machining is a novel process that has attracted considerable research interest. The machining of green compacts of powder metallurgical materials presents challenges, such as low strength, high brittleness, and issues with cutting forces, fracture, and surface quality control. In previous research, experimental methodologies have primarily been considered. However, in this study, a finite element simulation model tailored for machining analysis was introduced and rigorously validated. The behavior of the material was accurately depicted through a damaged plasticity model, which was calibrated using uniaxial tensile and compression tests. Afterward, a comprehensive finite element machining model was developed. Through quantitative analysis, the simulated cutting particles were evaluated and compared with experimental data. There was a marginal error of 6.35%. Additionally, the cutting surface dimensions were meticulously compared using a 3D white light interferometer. There were errors of 7.76% in terms of width and 8.42% in terms of depth, confirming that the precision of the model was within an acceptable margin. The impacts of various cutting parameters on the cutting force and surface integrity characteristics of machined green compacts were explored in this study. The optimal parameters were identified as a cutting depth of 0.15 mm, a speed of 90 m/min, and a cutting force of 452 N, which significantly enhanced the cutting efficiency and substantiated the reliability of the model.