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This paper proposes a novel spatio-temporal filter for video denoising that operates entirely in the wavelet domain and is based on temporal decorrelation. For effective noise reduction, the spatial and the temporal redundancies, which exist in the wavelet domain representation of a video signal, are exploited. Using simple and closed form expressions, the temporal information in the wavelet domain is first decorrelated in order to minimize the redundancy. The decorrelated noise-free coefficients are then modeled using a generalized Gaussian prior. For spatial filtering of the noisy wavelet coefficients, a new, low-complexity wavelet shrinkage method, which utilizes the correlation that exists between subsequent resolution levels, is proposed. Experimental results show that the proposed scheme outperforms state-of-the-art spatio-temporal filters in time and wavelet domains, both in terms of PSNR and visual quality.