SUMMARYIn this paper, a design method is proposed for a two-dimensional separable-denominator state-space digital filter based on the projection method. First, the square error function is expressed in terms of the coefficient matrix of the local state-space model. Next, the given FIR filter is realized by a local state-space model. An equivalent transform based on the eigenvalue-eigenvector decomposition of the impulse response Grammian is applied to this filter. The obtained model is approximated at lower order by orthogonal projection. The projection parameters are optimized by an iterative algorithm based on the error function, deriving a lower dimensional model with a higher design accuracy. The conventional lower dimensional approximation algorithm based on rounding down of the coefficient matrix is used to find the initial values in the present method. The stability of the filter obtained by the present method is always guaranteed. The effectiveness of the present method is confirmed by numerical examples.