In the content-based image coding, where each object in the scene is encoded independently, the shape, texture and motion information are very important factors. Though the contours representing the shape of an object occupy a great amount of data in proportion to the whole information, they strongly affect the subjective image quaility. Therefore, the distortion of contour coding has to be minimized as much as possible. In this paper, we propose a new method for the contour coding in which the contours are approximated to polygon and the eorror signal occurring from polygonal approximation are transformed with new basis functions. Considering the facts that confour segments occurring from polygonal approximation are smooth curves and error signals have two zero-ending points, we design new basis functions based on the Legendre polynomial and then transform the error signals with them. When applied to synthetic images such as circles, ellipses and etc., the proposed method provides, in overall, outstanding results in respect to the transform coding gain compared with DCT and DST. And in the case when applied to natural images, the proposed method gives better image quality over DCT and comparable results with DST.