Subtractive manufacturing [computer numerical controlled (CNC) machining] has high quality geometric and material properties but is slow, costly, and infeasible in some cases. On the contrary additive manufacturing (rapid prototyping) has total automation but compromises quality. A hybrid layered manufacturing process presented in this study combines the best features of both these approaches. It uses arc weld deposition for building near-net shapes, which are subsequently finish machined. Time and cost savings of this process can be attributed to reduction in NC programming effort and elimination of rough machining. It is envisioned as a low cost retrofitment to any existing CNC machine for making metallic objects without disturbing its original functionalities. Near-net shape building and finish machining happening at the same station is the unique feature of this process. A customized software generates the NC program for near-net shape building. The intricate details of integrating arc welding unit with a CNC milling machine are presented in this paper. © 2009 Springer-Verlag London Limited.