Hazelnut oil cake, a by-product in the cold-pressing of hazelnut oil, is a rich in valuable nutrients, which makes it a promising option for supplementation or as a raw material in the development of functional products. The aim of this work was to study the influence of partial or complete replacing of skim milk powder (SMP) with hazelnut press cake flour (HPCF) in varying ratios (0%, 25%, 50%, 75%, and 100%) on the physicochemical properties and sensory attributes of milk ice cream. The replacement modified the chemical composition of the ice cream mixture, resulting in a reduction (p < 0.05) of milk solids non-fat (MSNF), protein, and carbohydrates content, while simultaneously elevating the hazelnut content, and total fat content. This modification influenced the rheological characteristics of the ice cream mixtures, leading to an increase in the consistency coefficient from 1.32 to 7.66 Pa sn. Furthermore, a decline in overrun values (from 26.99% to 15.85%), an increase in hardness (from 6881.71 to 23,829.30 g), retarded melting properties, and variations in colour attributes were observed with higher concentrations of HPCF. In the sensory evaluation test, it was found that consumer acceptance was enhanced for the samples with partial substitution of SMP when compared to standard milk ice cream. The findings suggest that a replacement of milk powder with hazelnut cake by up to 75% is achievable, in order to obtain functional ice cream with adequate physicochemical and sensorial qualities.