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This paper presents a novel sectionalizing method for the build-up strategy in power system restoration. Power system restoration is the procedure of restoring power system elements after a partial or a complete blackout. Because of its economic and political importance, different strategies have been developed for power system restoration. One of the most practical and economical is the build-up strategy that includes the process of restoring separated parts (islands) in the power system and interconnecting them afterwards. This paper intends to develop a systematic algorithm for sectionalizing a power system considering various constraints such as black-start capability of generators, power supply-demand balance and independence of islands. Moreover, utilizing Wide Aare Measurement System (WAMS), each island will be fully observable in this method which is a crucial requirement for the restoration process. The New England 39 bus power system is used to demonstrate the proposed algorithm and verify the results. The proposed method is also applied to the IEEE 118 bus system as a large-scale power system to prove its capability in practical systems.