An image processing system, and a method of operation thereof, including: a feature selection module for determining subsets of point clouds, the subsets selected based on key points of a three-dimensional object; a feature matching module, coupled to the feature selection module, for generating matched results based on a matching transformation of the subsets; and a point registration module, coupled to the feature matching module, for refining the matched results based on a refinement transformation to optionally align different data sets of the point clouds for displaying the aligned data sets on a device, wherein the refinement transformation includes a refinement error less than a matching error of the matching transformation.