Low birth weight is an indicator of maternal-related multifactorial problems such as malnutrition, illness, and work overload. As a result, low birth weight is associated with maternal anaemia, and both of them were significant public health issues in developing nations. Low birth weight and anaemia are caused by insufficient nutrient intake, which is especially severe during pregnancy. So, this study aimed to assess the effect of maternal anaemia during the late trimester on low birth weight among newborns in Northwest Ethiopia. A systematic random sampling technique was used to select 211 participants for the primary data collection. Face-to-face interviews were used to collect data, while blood samples were collected using standard operating procedures. For further analysis, the data file was imported into Stata version 16 (MP) software. The binary logistic regression model was used to investigate significant factors related to low birth weight. Finally, the statistical significance of the variables was determined using a p value of ≤ 0.05. The prevalence of anaemia among pregnant women in the late trimester and newborns was 34 (16.11%, 95% CI: 11.42, 21.78) and 64 (30.33%, 95% CI: 24.20, 37.01), respectively. The mean ± standard deviation of the newborn babies' weight was 3.19 ± 0.49 kg. The proportion of low birth weight among newborns was 26 (12.32%, 95% CI: 8.20, 17.53%). The independent effect of anaemia on low birth weight was 4.19 times while all other factors were constant (COR = 4.19, 95% CI: 1.70, 10.30). Maternal educational status [unable to read and write (AOR = 10.94, 95% CI: 1.74, 68.58) and attained secondary education (AOR = 8.06, 95% CI: 1.53, 42.36)], and maternal anaemia (AOR = 3.51, 95% CI: 1.29, 9.55) were associated with low birth weight after adjusting with all other variables. In this study, the proportion of low birth weight was high. Here, maternal anaemia alone had a significant independent role in the development of low birth weight. Maternal education status and anaemic conditions were associated with low birth weight among newborns. Early detection and treatment of maternal anaemia during pregnancy is crucial with the usual nutritional-related care.