For vector quantization (VQ), it is extremely time-consuming to extract the similar codeword with input vector during the encoding process. In this paper, a novel algorithm based on Hadamard transform (HT) is proposed. Two inequalities derived after performing HT to all input vectors are used to early remove impossible codewords in the distortion computations stage. From the experimental results, it is shown that the proposed approach can largely decrease the computation time for achieving VQ coding with the same quality with full search algorithm. More specifically, compared with the DHSS algorithm, the proposed algorithm reduces the computational time by 25% to 61%. Compared with the Panpsilas algorithm, the proposed algorithm reduces the computational time by 60% to 70%. Compared with the Laipsilas algorithm, the proposed algorithm reduces the computational time by 42% to 55%. Compared with the HTPDE algorithm, the proposed algorithm reduces the computational time by 20% to 40%.