A method of manufacture of an integrated circuit packaging system includes: mounting an integrated circuit, having a device through via and a device interconnect, over a substrate with the device through via traversing the integrated circuit and the device interconnect attached to the device through via; attaching a conductive support over the substrate with the conductive support adjacent to the integrated circuit; providing a pre-formed interposer, having an interposer through via and a pre-attached interconnect, with the pre-attached interconnect attached to the interposer through via; mounting the pre-formed interposer over the integrated circuit and the conductive support with the pre-attached interconnect over the device through via; and forming an encapsulation over the substrate covering the integrated circuit, the conductive support, and partially covering the pre-formed interposer.