A bias compensation based least-squares algorithm is proposed for the parameter estimation of multi-input single-output system in the presence of input and output white noises. It is shown that the bias term is induced by the variances of input and output noises. Therefore, an efficient method which uses the observed input and output data directly is developed in this paper to estimate the unknown variances of white noises. The proposed bias compensation based least-squares algorithm can be established from the combination of the recursive least-squares estimation algorithm and white noise variances estimation algorithm. The effectiveness of the proposed algorithm is both analyzed theoretically and verified by a simulation example.