A method of manufacture of an integrated circuit packaging system includes: forming a package paddle; forming a lead adjacent the package paddle, the lead having a lead overhang protruding from a lead non-horizontal side and a lead ridge protruding from the lead non-horizontal side; mounting an integrated circuit over the package paddle; connecting an electrical connector to the lead and the integrated circuit; and forming an encapsulation over the integrated circuit, the lead, and the package paddle, the encapsulation under the lead overhang.