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This paper presents a Discrete Tchebichef Transform (DTT) based hybrid embedded coder for image compression applications. In this coder, DTT is coupled with Set partitioning in hierarchical coding techniques (SPIHT). Further, human visual system (HVS) with appropriate perceptual weights are applied to improve the perceptual quality of the reconstructed image. The compression and image reconstructon performance is compared with some the state-of-the-art coders in the literature. Extensive simulations on various kinds of images shows convincingly that,the proposed coder outperforms most of the coders.