Severe acute malnutrition (SAM) affects up to 50 % of children with HIV, especially those who reside in resource-constrained healthcare setting like Ethiopia. During subsequent follow-up of children factors related to incidence of SAM after antiretroviral therapy (ART) is set on, however, there is no prior evidence. An institution-based retrospective cohort study was employed among 721 HIV-positive children from 1 January to 30 December 2021. Data were entered using Epi-Data version 3.1 and exported to STATA version 14 for analysis. Bi-variable and multivariable Cox-proportional hazard models were employed at 95 % confidence intervals to identify significant predictors for SAM. According to this result, the overall mean (±sd) age of the participants was found to be 9⋅83 (±3⋅3) years. At the end of the follow-up period, 103 (14⋅29 %) children developed SAM with a median time of 30⋅3 (13⋅4) months after ART initiation. The overall incidence density of SAM was found to be 5⋅64 per 100 child (95 % CI 4⋅68, 6⋅94). Children with CD4 counts below the threshold [AHR 2⋅6 (95 % CI 1⋅2, 2⋅9,P= 0⋅01)], disclosed HIV status [AHR 1⋅9 (95 % CI 1⋅4, 3⋅39,P= 0⋅03)] and Hgb level ≤10 mg/dl [AHR 1⋅8 (95 % CI 1⋅2, 2⋅9,P= 0⋅03)] were significant predictors for SAM. Significant predictors of acute malnutrition were having a CD4 count below the threshold, children who had previously reported their HIV status, and having haemoglobin <10 mg/dl. To ensure better health outcomes, healthcare practitioners should improve earlier nutritional screening and consistent counselling at each session of care.