Minimal valid automata (MVA) refer to valid automata models that fit a given input-output sequence sample from a Mealy machine model. They are minimal in the sense that the number of states in these automata is minimal. Critical to system identification problems of discrete event systems, MVA can be considered as a special case of the minimization problem for incompletely specified sequential machine (ISSM). While the minimization of ISSM in general is an NP-complete problem, various approaches have been proposed to alleviate computational requirement by taking special structural properties of the ISSM at hand. In essence, MVA is to find the minimal realization of an ISSM where each state only has one subsequent state transition defined. This paper presents an algorithm that divides the minimization process into two phases: first to give a reduced machine for the equivalent sequential machine, and then to minimize the reduced machine into minimal realization solutions. An example with comprehensive coverage on how the associated minimal valid automata are derived is also included.