The permanent magnet synchronous machine (PMSM) presented in this paper consists of a new Steel-Canned Halbach Permanent Magnet (SCHPM) rotor, which provides a significant reduction in the total harmonic distortion of the air-gap flux and torque ripple of the machine. The proposed rotor consists of a two-segment Halbach PM array which is enclosed within a solid steel-can. The magnetic equivalent circuit (MEC) model is derived for analytical estimation of the magnetic flux density in the air-gap due to the rotor. The dimensions of the magnets and the thickness of the steel-can in the SCHPM rotor are obtained through parametric simulation using finite element analysis (FEA). The electromagnetic performance of the proposed machine is also analyzed using FEA to validate the air-gap flux density calculation from the MEC model. Finally, a three-phase, 30 kW, 10-pole PMSM is designed for the proposed rotor structure. The electromagnetic performance of the machine is analyzed using FEA and compared with the surface mount Halbach PMSM (SHPMSM) of the same power rating. It is found that the peak-to-peak torque ripple, core loss, and magnet loss are reduced by 32.6%, 7.03%, and 44.6%.