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We propose the implementation of spectral-amplitude-coding optical code division multiple access (SAC-OCDMA) as a contention resolution technique in optical burst switched (OBS) networks. The new system architecture is presented in details where an all-optical methodology for cancelling multiple access interference is proposed. Performance evaluation of the proposed system in both MAC and optical layers is introduced where the overall burst error rate of the system is evaluated in three cases: full, partial, and no code conversion capabilities taking into account the receiver dark current, thermal, and shot noises at the egress nodes. Our results reveal that a considerable improvement in the performance of each core node in the system is achieved by using SAC-OCDMA instead of WDM in the optical layer underneath an OBS based MAC layer. We also conclude that a slight increase in the employed number of code converters enhances the overall system performance noticeably. Finally, optimum values for the number of codes, which lead to minimum overall burst error rate, are reached at different traffic conditions.