This paper introduces a ¢¤£ discrete, non-separable transform for image processing, which can be regarded as a combination of the well known Discrete Cosine Transform (DCT) with an analytically derived quantization table that includes a compression ratio selection parameter. A ¥¦£ deformable surface model is used to approximate the image intensity and the introduced discrete transform is an intermediate step of the explicit surface deformation governing equations. The proposed transform is applied to lossy image compression and the obtained results are compared to those of a DCT-based compression scheme.