Previous area-based stereo matching algorithms find the disparity by first computing the sum of squared differences (SSD) between corresponding points using a rectangular window, and then searching the position of the minimum SSD within the disparity range. These algorithms generate relatively many matching errors around depth discontinuities, since the SSD function may fail to search for the minimum because of varying disparity profiles in such areas. In this paper, in order to improve the matching accuracy around the depth discontinuities, a new correlation function based on robust estimation technique is proposed for stereo matching. In addition, while previous stereo algorithms utilize a single rectangular window for computing the correlation function, the proposed matching algorithm utilizes 4-directional line masks additionally to reduce the matching errors further. It has been turned out that the proposed algorithm reduces matching errors around depth discontinuities significantly. Experimental results are presented in this paper, comparing the performance of the proposed technique with those of previous algorithms using both synthetic and real images.