This paper introduces a hierarchical architecture for decentralized state estimation in which the lower level is performed at each power system substation. At this local level, a coestimation algorithm is employed which is able to provide not only estimates for nodal voltages at each substation bus section, but also the current substation topology. The higher hierarchical level, carried out at the regional control center, is responsible for coordinating the local estimates by processing power flow measurements on the network branches which interconnect the system substations. The proposed estimation architecture considerably reduces the burden of transmitting the ever increasing amount of data gathered at substation level for processing at control centers. Case studies conducted on a network composed of several substations with distinct topologies are employed to illustrate and evaluate the proposed methodology.