A system and method for bit-exact lossless compression coding of still and moving images. An original image is encoded to produce a lossy compressed image, and is also used to construct a sorted list of bin values to which the lossy image is compared to generate output from which the original image can be losslessly reconstructed. The similarity of corresponding pixel values between the lossy image and the original image permits efficient generation of a lossless residual that allows for bit-exact reproduction of the original image. Pixel values nearly equidistant from two sorted list values are on a “cusp” and either directly coded or flagged as cusp values from which corresponding lossless values can be re-determined. Non-cusp pixel values are coded as the difference between the index of the sorted bin having a value nearest to the floating point value being processed, and the index of the sorted bin containing the exact pixel value of the original image.