Because of the outstanding contribution in improving compression efficiency, block-based quantization has been widely accepted in state-of-the-art image/video coding standards. However, false contour artifacts are introduced, which result in reducing the fidelity of the decoded image/video especially in terms of subjective quality. In this paper, a block-based decontouring method is proposed to reduce the false contour artifacts in the decoded image/video by automatically dithering its direct current (DC) value according to a composite model established between gradient smoothness and block-edge smoothness. Feature points on the model with the corresponding criteria in suppressing contour artifacts are compared to show a good consistency between the model and the actual processing effects. Discrete cosine transform (DCT)-based block level contour artifacts detection mechanism ensures the blocks within the texture region are not affected by the DC dithering. Both the implementation method and the algorithm complexity are analyzed to present the feasibility in integrating the proposed method into an existing video decoder on an embedded platform or system-on-chip (SoC). Experimental results demonstrate the effectiveness of the proposed method both in terms of subjective quality and processing complexity in comparison with the previous methods.