High soil erosion rates, sediment transport, and loss of agricultural nutrients have been caused by poor land-use practices and management systems. This study mainly focuses on sediment yield modeling and evaluation of best management practices of the Daketa sub-basin using the SWAT model. Calibration and validation were done using the Soil and Water Assessment Tool (SWAT) model in Daketa sub-basin. The coefficient of determination (R2), Nash–Sutcliffe efficiency coefficient (ENS), and percent bias (PBIAS) were used to evaluate the model performance. During the calibration and validation, monthly sediment yield R2 values of 0.80 and 0.85, ENS values of 0.74 and 0.81, and PBIAS values of 0.0829 and 0.124 were obtained. The mean annual sediment yield of the Daketa watershed is 14.43 t/ha/year. Basin management scenarios were applied to reduce sediment production in the sub-basins. Four scenarios were developed such as (i) baseline, (ii) 5 and 10 m wide filter strip, (iii) waterway grass, and (iv) terraces to select the best management practices in the basin. The result shows that grassy waterway reduces sediment yield with an efficiency of 74.6% relative to the baseline scenario. Generally, the results indicated that grass waterways have a high potential for reducing the volume and velocity of runoff, sediments, and agrochemicals from agricultural catchments.