In the upcoming smart grid environment many more measurements will be available, which can be locally processed by the so-called substation state estimator (SSE). Distribution substations serve energy to a large set of feeders, each one delivering power to a certain number of secondary transformers. In this context, the SSE may have to deal with a huge network model, comprising several hundred or even thousand buses. Taking advantage of the weak electrical coupling existing among the set of feeders connected to the same or adjacent substations, a two-stage procedure is proposed in this paper to efficiently solve the SSE. In the first stage the overall SE is decomposed into f + s WLS subproblems (f and s being the total number of feeders and substations, respectively), which are then solved in a decoupled manner. The second stage, involving a linear WLS problem, consists of coordinating the solution provided by each subsystem (feeder or substation). The proposed solution scheme has a number of advantages, as shown by the case studies.