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This paper proposes a new procedure of low-complexity to determine the encoding parameters for the MPEG-4 AAC encoder under real-time constraints. In particular, it addresses the optimization problem of minimizing the distortion subject to a rate constraint for an MPEG-4 AAC encoder. Existing implementations use the heuristic two loop search to solve this optimization problem. This paper presents a new solution algorithm which achieves distortion values significantly lower than the two loop search and which, due to its low computational complexity, is a promising technology for future AAC implementations. We show via simulations that the technology presented in this paper significantly outperforms previous technologies.