With the advent of industry 4.0, which conceptualizes self-monitoring of rotating machine parts by adopting techniques like data analytics, cloud computing, Internet of things, machine learning (ML), and artificial intelligence. The significant research area in predictive maintenance is tool condition monitoring (TCM) as the tool condition affects the overall machining process and its economics. Lately, machine learning techniques are being used to classify the tool’s condition in operation. These techniques are cost saving and help industries with adopting future-proof solutions for their operations. One such technique called discriminant analysis (DA) must be examined particularly for TCM. Owing to its less-expensive computation and shorter run times, using them in TCM will ensure the effective use of the cutting tool and reduce maintenance times. This article presents a Bayesian optimized discriminant analysis model to classify and monitor the tool condition into three user-defined classes. The data are collected using an in-house designed and developed data acquisition (DAQ) module setup on a Vertical Machining Center (VMC). The hyperparameter tuning has been incorporated using Bayesian optimization search, and the parameter that gives the best model was found out to be “linear,” achieving an accuracy of 93.3%. This study confirms the feasibility of machine learning techniques like DA in the field of TCM and using Bayesian optimization algorithms to fine-tune the model, making it industry ready.