Corrosion damage is reported to be one of the leading causes of steel pipeline failure causing significant financial losses to operators and damage to the surrounding environment. As part of a rising confrontation to pipeline integrity management, researchers are continuously seeking better ways to assist on how to identify, assess, and prevent such incidents. Thus, there is a crucial need to establish a connection between assessment of pipeline condition and its structural stability. To achieve this, a three-dimensional finite element (FE) model is developed. The effects of geometry parameters such as defect thickness and spread angle are considered. Results show that thicker pipelines with corrosion groove perform better structurally than slender equivalents. The impact of corrosion damage is assessed to be significant on pipe stability with pipelines experiencing higher displacement and wall stresses with increasing defect depth and spread angle. A protective measure has been proposed using the buried pipes bedding system. The most critical spread angle is at 60 deg for unprotected pipe sections and 90 deg for bedded protected sections.