A new color quantization (CQ) technique and its VLSI implementation is introduced. It is based on image split into windows and uses Kohonen Self Organized Neural Network Classifier (SONNC). Initially, the dominant colors of each window are extracted through the SONNC and then are used for the quantization of the colors of the entire image. The image split in windows offers reduction of the memory requirements and feasibility of suitable VLSI implementation of the most time consuming part of the technique. Applying a systematic design methodology into the developed CQ algorithm, an efficient system-onchip based on ARM processor, which achieves high speed processing and less energy consumption, is derived.