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Voltage islands enable core-level power optimization for System-on-Chip (SoC) designs by utilizing a unique supply voltage for each core. Architecting voltage islands involves island partition creation, voltage level assignment and floorplanning. The task of island partition creation and level assignment have to be done simultaneously in a floorplanning context due to the physical constraints involved in the design process. This leads to a floorplanning problem formulation that is very different from the traditional floorplanning for ASIC-style design. In this paper, we define the problem of architecting voltage islands in core-based designs and present a new algorithm for simultaneous voltage island partitioning, voltage level assignment and physical-level floorplanning. Application of the proposed algorithm to a few benchmark and industrial examples is demonstrated using a prototype tool. Results show power savings of 14%-28%, depending on the constraints imposed on the number of voltage islands and other physical-level parameters.