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Recently interest in investment in agriculture has been growing. The 2007/08 food price spike and the consequent period of volatile food price have compelled imported food dependent nations to reconsider their food security options. Together with global financial crisis that resulted in collapse of equity, bond market and reduced portfolio investment, the boom led to surge of land acquisition in developing nations. Despite the dearth of concrete data, opinions are divided with regard to its implication. Some see it as an opportunity for developing nations as it reverses the underutilized agriculture creates job opportunity and transfers technology. On the other hand, especially in light of the weak institutional and legal framework in developing nations, the situation might turn counterproductive which could lead to environmental damage and resource degradation which will in turn endangers food security. In spite of serious critics, Ethiopia has engaged itself in leasing out large scale agricultural land to foreign investors.hence, this work is aimed at assessing the extent to which Ethiopian legal framework pertaining to situation has committed itself to deal with it.