This paper presents a new wavelet based image coder with the property of progressive multi-resolution. After the image is decomposed with lift wavelet

the wavelet coefficients are quantized visually lossless by utilizing the properties of HVS. Then

in the constraint of the bits budget

the bits are allocated optimally to each subband according to the rate-distortion curve and their contribution to the visual effect. At last each subband is independently encoded with the procedures of layered quantization and arithmetic coding. Without the iteration of all the quantization steps

the bit allocation algorithm deduces the theoretic formula of allocation by modeling the wavelet coefficients as generalized Gaussian distribution. The allocation result is optimal in the sense of rate-distortion. The experiments show that

compared with the classical coders

the coder has the near PSNR values and the better visual effect in low bit rate such that it displays the superior performance.