The commencement of the Physical Education Program at AAU dates back to the early 1960s.  In fact, in 1962 a grant awarded to an American Scholar to come to Ethiopia and carry out a survey of the needs for sports and recreation and a program in Physical Education.  As a result of the survey, a two-year diploma program was initiated in 1963. The Department, known as the Department of Health and Physical Education, was headed by an American and was organized to offer courses under the then Faculty of Education. The purpose of the program was to provide well-qualified Physical Education teachers for the public schools in Ethiopia. To join the program, a candidate was required to pass a special physical skill test and an interview in addition to grades on the Ethiopian School Leaving Certificate Examinations. Forty students joined the short-lived program that was terminated after the 1965 graduation.  Later the Department was organized under the Dean of Students with the purpose of arranging and conducting co-curricular activities until 1979.  In 1980, it was upgraded to a full-fledged unit with the status of an academic and service-giving department, named Department of Physical Education. However, the undergraduate program was closed after some years.

Following the reopening of the undergraduate program in 2002, student enrolment has been increasing notably. In 2005 the Department launched a graduate program for the first time in five areas of specialization.

The Department has completed the design of a new curriculum to offer a three-year degree program in Sport Science and a four-year degree program in teaching Physical Education and Sports (i.e., with a one year additional Postgraduate Diploma Program in teaching Physical Education and Sports) after completing a three year degree program in Sport Science.