An automated system and method of establishing a local mobility domain (LMD) and a local mobility agent (LMA) on a mobile terminal node (MN) using Internet Protocol version (IPv6) preferably includes: establishing within the MN a newly contacted access router (AR) as the LMA and then receiving from the LMA and storing a list of neighboring ARs, which comprise the LMD. Each AR contains a stored list of neighboring ARs that are within a predetermined range of the AR, which is dynamically set by a network manager. The MN registers a retrieved local and regional address with both the LMA and a home agent (HA.) When the MN moves to a new AR, the stored list of the new AR is checked for the present LMA. The LMA is only changed to the new AR and re-registered with the HA if the new AR is in a different LMD.