A new method for improving centroid accuracy, thereby pointing accuracy, is proposed. Accurate centroid estimation is critical for free-space optical communications where the number of photons from the reference optical sources such as stars or an uplink beacon is limited. It is known that the centroid accuracy is proportional to the SNR. Presence of various noise sources during the exposure of CCD can lead to significant degradation of the centroid estimation. The noise sources include CCD read noise, background light, stray light, and CCD processing electronics. One of the most widely used methods to reduce the effects of the noise and background bias is the thresholding method, which subtracts a fixed threshold from the centroid window before centroid computation. The approach presented here, instead, utilizes the spot model to derive the signal boundary that is used to truncate the noise outside the signal boundary. This process effectively reduces both the bias and the noise. The effectiveness of the proposed method is demonstrated through simulations.