T h e arbitrarily shaped transform (AST) of the segmented motion field generated by modified optical flow algorithm (MOFA) is suggested in this paper. Because the transform kernels are dependent on the shape of the coded region, information about t h e contours of the objects must be transmitted. To achieve d a t a compression, coefficient selection function (CSF) is defined for AST coefficients reduction. Since shape information costs lots of d a t a amount, a rectangle approximation method is also developed. According t o the simulation results, the proposed coding method is efficient and its performance is much better than the traditional block matching algorithm no matter in terms of PSNR or bit-rate. In addition, the proposed algorithms are integrated together to build a very low bit-rate video coding system. From some primary simulations of the system, the proposed method can guarantee 34 d B PSNR for most cases at around 10 Kbps; Furthermore, the segmentation of objects is potential for object scalability.