The objective of this paper is to decide optimal location of a pin-hole to minimize stress concentration around the hole in a rotating disc. The focus of this investigation is to evaluate the effect of pin-hole on stress distribution around the hole using optimum design technique and finite element analysis. Design variables are the radial and the angular location of pin-hole from center of the hole and objective function is the maximum stress around hole in a rotating disc. Using first order method of optimization technique, we found that the maximum equivalent stress around the hole with optimized pin-hole could be reduced by 15.1% compared to that without pin-hole.