A novel few-mode fiber (FMF) based saturable absorber (SA) that works on the principle of nonlinear multimode interference has been proposed. To optimize the FMF parameters for the fabrication of SA, which is a combination of FMF with two single mode fibers (SMFs), a detailed numerical simulation is performed. The developed SMF-FMF-SMF structure exhibits a modulation depth and saturation intensity of 30.6% and 11.01 MW $/$ cm2, respectively. By inserting the fabricated SA in an all-normal dispersion Ytterbium doped cavity, we have been able to generate a laser pulse duration of 300 fs with an average power/pulse energy of 2.4 mW/64.8 pJ and a repetition rate of 37 MHz as an output. Thus, the proposed SA helps in generating stable pulses from the laser with enhanced output characteristics. We envisage that the fabricated SA would play an indispensable role in the development of ultrafast fiber lasers. © 1989-2012 IEEE.