A method and system for encoding an image for providing encoded data for transmission or storage. After the image is decomposed by a transform into sub-bands containing blocks or samples of transformed image data organized in a number of bit-planes, it is adjusted to reduce the number of bit-planes prior to being encoded by a bit-plane coder into encoded data. The reduction of the bit-planes is based on the compression factor of the encoding process, the transmission target bit-rate, the type of sub-band and the resolution level of the transformed image data.