In this paper, we consider the optimal design of networked estimators to minimize the communication/measurement cost under the networked observability constraint. This problem is known as the minimum-cost networked estimation problem, which is generally claimed to be NP-hard. The main contribution of this work is to provide a polynomial-order solution for this problem under the constraint that the underlying dynamical system is self-damped. Using structural analysis, we subdivide the main problem into two NP-hard subproblems known as (i) optimal sensor selection, and (ii) minimum-cost communication network. For self-damped dynamical systems, we provide a polynomial-order solution for subproblem (i). Further, we show that the subproblem (ii) is of polynomial-order complexity if the links in the communication network are bidirectional. We provide an illustrative example to explain the methodologies. . 1. In this paper, agent/sensor/estimator is used interchangeably. of measurements. This cost may represent sensor expenses, or utility/energy consumption by sensors [19]. On the other hand, the MCCN problem is to optimally design the communication network to minimize the communication cost at the agents, where the cost may represent communication reliability [20], communication energy/power [21], or distance (also referred to as capacity-infrastructure cost) [22], among others. Related literature: Optimal sensor selection [23], [24] and dual problem of optimal actuator placement [25], [26] is shown to be NP-hard 2 in the literature. The problem of optimal selection of sensors (information gatherers) is shown to be reducible to a minimum set covering problem [23].The problem of optimal input selection is shown to be reducible to r-hitting set problem in [25]. These references imply that the MCSS problem is NP-hard, in general. On the other hand, cost-optimal communication network design is considered in [18], [20]-[22], [27]-[29]. In [27], tradeoffs between optimal sensor placement and minimization of communication cost is claimed to be NP-hard and therefore a near-optimal solution is proposed. The near-optimal approximation 3 solution in [27] is of complexity O(n log(n)).In [22], communication to a central unit based on Poisson-Voronoi spanning tree with application to tracking in mobile communication systems is discussed. In the literature, a few references consider the optimal communication network design under observability constraints [18], [28], [29]; in these works, the main objective is to design the network such that the communication cost to a central base is minimized while satisfying observability constraint as a necessary condition 2. NP-hardness (Non-deterministic Polynomial-time hardness) is the defining property of a class of problems that has no solution in the time-complexity upperbounded by a polynomial function of the input parameters.3. For NP-hard problems, typically a ρ-approximation algorithm is provided with provable guarantees on the factor ρ of the returned solution to the optimal one.