In this paper, we have developed Yb-doped fiber suitable for creation of all-fiber seed laser schemes operating near 977 nm. The fiber was based on a ring-doping design (cladding was partially doped with Yb-ions), which allowed us to fabricate a relatively small core and provide mode field diameter (MFD) of the active fiber comparable with standard fibers (to achieve small splicing losses with commercially available optical fibers) and, simultaneously, increase absorption from the cladding to keep a reasonably high lasing efficiency. So MFDx of the fiber was 12 μm, MFDy was 14 μm. Outer silica cladding of the active fiber was decreased to diameter of 80 μm and a special pump and signal combiner was used to inject pump and signal into the active fiber. Based on the developed Yb-doped fiber an all-fiber polarization maintaining mode-locked laser with central wavelength around 977 nm was demonstrated for the first time. SESAM was used as a saturable absorber. The laser was self-starting for pump powers above 4.6 W, with the output power of 3 mW. The autocorrelation was the best fitted with sech2 profile and pulse duration was estimated to be as long as 9.5 ps. The fundamental cavity frequency corresponded to the pulse repetition rate of 33.532 MHz. Signal-to-noise ratio measured in the radio frequency range was more than 50 dB, the line width was below 1 kHz, which indicate ultimate stability of the fabricated mode-lock laser.