Motion estimation (ME) is the most computationally intensive part of a video coding system. Therefore it is very important to reduce its computational complexity. In this paper, a novel all-binary approach for reducing the computational complexity of sub-pixel accurate ME is proposed. An efficient hardware architecture for the proposed all-binary; sub-pixel accurate motion estimation approach is also presented. The proposed hardware architecture has significantly low hardware complexity and therefore very low power consumption. It can process 720p video frames at 30 fps in a pipelined fashion together with the integer ME hardware. Therefore, it can be used in real-time low power video coding systems required by many mobile consumer electronics devices.