In fifth-generation (5G) cellular networks, a Machine-to-Machine (M2M) communication is considered a promising approach to minimize interference and power consumption. The localization of unknown machines in M2M communication is important to achieve improved energy efficiency in cellular networks. Therefore, a hybrid location-aware framework was developed in this paper to reduce the interference and power consumption in M2M communication. The proposed technique utilizes a Received Signal Strength (RSS)-based localization algorithm to identify the location and signal strength of an unknown user. Here, the system choice the communication mode selection based on the distance and signal strength between the M2M pair.