In this paper a real-time model-based geometric control system is proposed for workpiece accuracy in bar turning. An on-line ultrasonic measurement system that operates in the presence of cutting fluid is employed for workpiece diameter measurement. A state space mechanistic model is used to overcome the delay in the feedback loop. A Kalman Filter is used in a predictor-corrector fashion to update model predictions using on-line measurements. A full state feedback controller with an integral control action is designed and used to manipulate the tool position in real-time for machining error compensation. The performance of the proposed control strategy is evaluated through cutting experiments performed on a CNC turret lathe retrofitted with an open architecture controller.