Recently, the demand for Ultra-precision products is rapidly increasing, especially in such industries as semi-conductors, computers, aerospace, and precision machinary. Ultra-precision processing is also extremely needed for NT in the field of mechanical engineering. Lately, together with drastic advancement of electronic and photonics industry, the need of Ultra-precision processing is increased in the manufacturing of various kernel parts, which are connected with these industrial fields. Especially, motion accuracy to nanometers is required in order in stroke of hundreds millimeters according as the diameter of the processed object great and the processing accuracy rises. In this case, the response speed absolute delay due to inertial mass of the moving parts is very large. Therefore, real-time motion error compensation becomes the barest necessity. In this paper, we used ultra-precision cutting unit (UPCU) to cope with the problem. A special UPCU was designed and tested to obtain sub-micrometer from accuracy in diamond turning of flat surfaces. The thermal growth spindle error was compensated in real time using the UPCU driven by piezoelectric actuator along with a laser encoder displacement sensor.