The app known by the Amharic word Awter – has taken five years to develop by a team that included well-known composer Elias Melka.
According to developers, the app will comprise of a huge range of Ethiopian music covering all genres and languages.
Users will pay 4.50 birr ($0.16, £0.12) to download a single song and 15 birr ($0.52, £0.41) to download an album.
Any tracks downloaded on Awter, which will be available to Android phone users, will not be shareable in order to maximise revenue.
State telecoms company Ethio-Telecom has backed the project and will also take a share of the profits.