Some 200,000 people are at risk of being displaced from land-grabbing, with at least 350,000 hectares of land leased since 2008 in south-west Ethiopia alone, according to the Oakland Institute.
"The impact is going to be terrible, because we can't expect this kind of development to benefit the local population," said Oakland's policy director Frederic Mousseau.
An additional 90,000 hectares are marketed as "available" in the federal land bank, Mousseau said.
"They will be losing their livelihood, and just join the millions of people that are relying on food aid in Ethiopia," he said.
Driven by recent food, energy and climate crises, investors from richer nations have been acquiring rights to vast tracts of land in several African nations to meet demand for bio-fuels, crops and mining resources.
Ethiopia is among the Horn of Africa nations affected by extreme drought, that has left some 12 million people in danger of starvation and spurred a global fund-raising campaign.
Some 4.56 million people in Ethiopia are in need of emergency aid, according to the UN.
But the Ethiopian government spokesman Bereket Simon rejected the report.
"The allegations of land grabbing, I think the Ethiopian government is not operating in that fashion," Bereket said.
"It is a responsible government that knows what it is doing," he added.
Under Ethiopian law, pastoralists have the right not to be displaced from their own land and must be consulted when land is taken over.
Bereket said local groups will be compensated if they are displaced.
"According to the constitution, we provide adequate compensation as well as giving them jobs. We make sure their lives are not being hampered," he told AFP.
The report adds to warnings earlier this week by rights group Survival International, who accused authorities of intimidating local populations to leave their land.
"We've had reports of heavy handedness, and it's clear that the government is paving the way for these projects to take off," said spokeswoman Fiona Watson.
The group's findings were based on information from local sources and international workers in the region.
Land buyers in poorer nations come from countries like Britain, China, the Gulf states, Saudi Arabia and South Korea, a World Bank report last year said.
On Thursday, Germany's Africa policy coordinator said the practice of buying up land in the Horn of Africa by foreign companies was contributing to the drought.
"This catastrophe is also man-made," Guenter Nooke said.
Ethiopia's south-west Omo region is the site of Africa's largest hydroelectric dam project Gibe II, which also threatens to displace communities when construction begins later this year.
The Chinese government vehemently denied any part in buying up land in Africa.
"China has never had plans to buy land overseas and China has never purchased land in Africa," the foreign ministry said in a statement sent to AFP.