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Current large distributed system allows users to share and trade resources. In cloud computing, users purchase different resources like network bandwidth, computing power and storage system from one or more cloud providers for a limited period of time with a variable or fixed price. Federated cloud is a mechanism for sharing resources thereby increasing scalability. Allocating resources in cloud is a complex procedure. In order to improve resource allocation agent based resource allocation method is used. In this method, the user needs not know who is the cloud service provider and where the resources reside. The consumer gets the resources with the minimum price. The proposed system has three types of agents namely Consumer agent, Resource Brokering agent and Resource Provider agent.