Unified Modeling Language (UML) has become a de facto standard for design, specification and modeling of object oriented software systems. UML structures being graphical in nature lack defining semantics of the systems and are prone to causing errors. Formal methods are proved to be a powerful tool for requirement analysis, design and specification of software systems. Hence, linking UML with formal approaches will enhance modeling power of software systems. In this paper, an approach is developed by integrating UML and Z notation focusing on equivalence relation of the state diagrams. The Z is used because it is based on the first order predicate logic having rigorous computer tool support. The reflexivity, symmetry and transitivity properties, being important at design level, are identified and described. It is believed that this approach will be effective and useful at both academics and industrial level. The need, reasoning and benefits of the integrated approach are discussed. The resultant formal models are analyzed and validated using Z/Eves tool.