Abstract: We put forward a special generalized correlation algorithm for estimation of time delay based on Wavelet Transform and give its expressions iii time and frequency domains, respectively, for estimating time difference of the received signals at two spatially separated sensors. This novel algorithm is more efficient, and suitable for more generalized signal and noise conditions, e.g. low signal to noise ratio (SNR), compared with direct correlation method. To improve the time delay estimation accuracy, this paper introduces the re-weighting method with mother wavelets based on the generalized correlation method for estimation of time delay. The two methods are proved to be efficient by the simulations.