A positioning system for a machine is disclosed. The positioning system includes a satellite positioning unit to generate signals indicative of a location of the machine in a worksite and an inertial measurement unit (IMU) to generate signals indicative of a position of the machine. A controller is communicated with the satellite positioning unit and the IMU. The controller determines a first error value associated with a location of the machine based on signals received from the satellite positioning unit. The controller further determines a second error value associated with a location and a position of the machine based on signals received from the satellite positioning unit and signals received from the IMU, respectively. Further, a location of the machine is determined based on signals received from the satellite positioning unit and the IMU if the first error value is less than the second error value.