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Leakage energy will be the major energy consumer in future deep sub-micron designs. Especially the memory sub-system of future SOCs will be negatively affected by this trend. In order to reduce the leakage energy, memory banks are transitioned to a low-energy state when possible. This transition itself costs some energy which is termed as the transition energy. In this paper we present, as the first approach of its kind, a novel energy saving replacement policy called LRU-SEQ for instruction caches. Evaluation of the policy on various architectures in a system-level environment has shown that up to 23% energy savings can be obtained. Considering the negligible hardware impact, LRU-SEQ offers a viable choice for an energy saving policy.