In recent years, there is a significant development in the field of image denoising. It involves the methods from both spatial domain as well as transform domain. In this paper, we are proposing a hybrid based denoising technique applicable for an image corrupted by Gaussian noise. The method uses both spatial and transforms domains. In transform domain, wavelet based shrinkage technique is used and it is followed by non-local means in spatial domain. This process is applied in iterative manner. Simulation is conducted on both synthetic and real images. The results obtained indicates that, the proposed method performs better.