A novel method is proposed to fabricate micro Diffractive Optical Elements (DOE) using micro cutting tools shaped with focused ion beam (FIB) milling. Micro tools with nanometric cutting edges and complicated shapes are fabricated by controlling the tool facet's orientation relative to the FIB. The tool edge radius of less than 30 nm is achieved for the nano removal of the work materials. Semi-circular micro tools and DOE-shaped micro tools are developed to fabricate micro-DOE and sinusoidal modulation templates. Experiments show that the proposed method can be a high efficient way in fabricating micro-DOE with nanoscale surface finishes.