A method of manufacture of an integrated circuit packaging system includes: providing an integrated circuit with an adhesive attached thereto; connecting the integrated circuit and a plated interconnect pad; attaching an embedded interconnect to the plated interconnect pad; and forming an encapsulation, having an encapsulation first side and an encapsulation second side, around the integrated circuit, the embedded interconnect, and the plated interconnect pad with the embedded interconnect exposed from the encapsulation second side and the plated interconnect pad and the adhesive exposed from the encapsulation second side.