The fabrication and properties of novel burnable absorber fuel design concepts with oxide pellets containing either a lumped $Gd_2O_3$ rod, a mini-pellet, or a spherical particle in the centerline of the oxide pellet, is investigated to propose the lumped $Gd_2O_3$ burnable absorber fuel concept to improve nuclear fuel performance with longer fuel cycle length and better fuel utilization. The unique characteristic of the lumped $Gd_2O_3$ burnable absorber fuel is its high spatial self‐shielding factor that reduces its burn-out rate and, therefore, improves the reactivity control. Oxide pellets containing lumped $Gd_2O_3$ were fabricated by using a combination of cold isostatic pressing and MW sintering at $1500^\circ C$ of 8 wt. % yttria-stabilized zirconia, a surrogate for $UO_2$. The effect of the shape, size, and shrinkage rate mismatch on the fabrication of the oxide pellets containing lumped $Gd_2O_3$ was investigated by the microstructural analysis of the interfacial cracks after the fabrication of the duplex oxide pellets and by the finite element method calculation of the sintering stresses during the fabrication of the duplex oxide pellets. The fabrication of duplex oxide pellets by using high pre-sintered density $Gd_2O_3$ mini-pellet resulted in internal cracks formation at the interface between the $Gd_2O_3$ and 8 wt. % yttria-stabilized zirconia. The internal cracks were not observed with the high pre-sintered density $Gd_2O_3$ spherical particles. This difference could be attributed to the formation of higher and localized stresses at the edges of the $Gd_2O_3$ mini-pellet during the sintering process. The addition of $Gd_2O_3$ spherical particle resulted in lower and symmetric stresses at the interface. The fabrication possibility of $UO_2$ oxide pellets containing lumped $Gd_2O_3$ has been demonstrated. The possible relocation of the $Gd_2O_3$ spherical particle during the normal reactor operation was evaluated by performing quenching tests of the duplex oxide pellets from $800^\circ C$, $1000^\circ C$, and $1200^\circ C$, respectively. The quenching test results showed that no relocation of the $Gd_2O_3$ was observed. The performance of the oxide pellet containing lumped $Gd_2O_3$ during normal operation and accident conditions need to be investigated.