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Multithreshold CMOS (MTCMOS) technology has become a popular technique for standby power reduction. Sleep transistor insertion in circuits is an effective application of MTCMOS technology for reducing leakage power. In this paper, we present a fine-grained approach where each gate in the circuit is provided with an independent sleep transistor. Key advantages of this approach include better circuit slack utilization and improvements in ground-bounce-related signal integrity (which is a major disadvantage in clustering-based approaches). To this end, we propose an optimal polynomial-time fine-grained sleep transistor sizing algorithm. We also prove the selective sleep transistor placement problem as NP-complete and propose an effective heuristic. Finally, in order to reduce the sleep transistor area penalty, we propose a placement-area-constrained sleep transistor sizing formulation. Our experiments show that, on average, the sleep transistor placement and optimal sizing algorithms gave 50.9% and 46.5% savings in leakage power as compared with the conventional fixed-delay penalty algorithms for 5% and 7% circuit slowdown, respectively. Moreover, the postplacement area penalty was less than 5%, which is comparable to clustering schemes.