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In this paper, we propose an algorithm for image encryption using chaotic maps and gyrator transform. Chaotic Logistic and tent maps are used to generate the required random bit sequences. Pixels of the plain image are encrypted through gyrator transform, and then it is partitioned into 8 bit map planes. Later, the bits of each plane are substituted according to random bit matrix that is the products of chaotic maps. The proposed method produces encrypted image whose performance is evaluated by chi-square test, correlation coefficient, Number Pixel of Change Rate (NPCR), Unified Average Changing Intensity (UACI). Based on the fact that continuous form of gyrator transform has very high computational load, then a discrete form of gyrator transform is formulated for achieving better results that is widely used in optical systems. The computational overhead is highly reduced in this formulation by employing Fast Fourier transform.