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Images has very significant role in digital media. However, generally digital imaging generates large amounts of data it need to be compressed, without loss of relevant information or simply lossless compression. This paper presents a novel lossless image compression technique in spatial domain. The proposed algorithm divide the image into no. of blocks uses variable bits to store each block pixels. Calculation of variable bits is dependent on pixel values of each block. The advantage of proposed scheme, it is dependent upon pixels correlation with in a block. Experimental results show that our proposed algorithm gives better compression efficiency as compared to many existing state-of-the-art lossless spatial domain image compression algorithms such as LZW, RLE and DEFLATE used in TIFF, GIF and PNG formats.