Knee Osteoarthritis (KOA) is a leading cause of disability and physical inactivity. It is a degenerative joint disease that affects the cartilage, cushions the bones, and protects them from rubbing against each other during motion. If not treated early, it may lead to knee replacement. In this regard, early diagnosis of KOA is necessary for better treatment. Nevertheless, manual KOA detection is time-consuming and error-prone for large data hubs. In contrast, an automated detection system aids the specialist in diagnosing KOA grades accurately and quickly. So, the main objective of this study is to create an automated decision system that can analyze KOA and classify the severity grades, utilizing the extracted features from segmented X-ray images. In this study, two different datasets were collected from the Mendeley and Kaggle database and combined to generate a large data hub containing five classes: Grade 0 (Healthy), Grade 1 (Doubtful), Grade 2 (Minimal), Grade 3 (Moderate), and Grade 4 (Severe). Several image processing techniques were employed to segment the region of interest (ROI). These included Gradient-weighted Class Activation Mapping (Grad-Cam) to detect the ROI, cropping the ROI portion, applying histogram equalization (HE) to improve contrast, brightness, and image quality, and noise reduction (using Otsu thresholding, inverting the image, and morphological closing). Besides, the focus filtering method was utilized to eliminate unwanted images. Then, six feature sets (morphological, GLCM, statistical, texture, LBP, and proposed features) were generated from segmented ROIs. After evaluating the statistical significance of the features and selection methods, the optimal feature set (prominent six distance features) was selected, and five machine learning (ML) models were employed. Additionally, a decision-making strategy based on the six optimal features is proposed. The XGB model outperformed other models with a 99.46 % accuracy, using six distance features, and the proposed decision-making strategy was validated by testing 30 images.