Advances in VLSI technology have brought us completely new design principles for the high-performance switching fabrics including ATM switches. From a practical point of view, port scalability of ATM switches emerges as an important issue while complexity and performance of the switches have been major issues in the switch design. In this paper, we propose a cost-effective approach to modular ATM switch design which provides the good scalability. Taking advantages of both time-division and space-division switch architectures, we propose a practically implementable large scale ATM switch architecture. We present a scalable shared buffer type switch for a building block and its expansion method. In our design, a large scale ATM switch is realized by interconnecting the proposed shared buffer switches in three stages. We also present an efficient control mechanism of the shared buffers, synchronization method for the switches in each stage, and a flow control between stages. It is believed that the proposed approach will have a significant impact on both improving the ATM switch performance and enhancing the scalability of the switch with a new cost-effective scheme for handling the traffic congestion. We show that the proposed ATM switch provides an excellent performance and that its cell delay characteristic is comparable to output queueing which provides the best performance in cell delay among known approaches.