A method and system for acoustic echo cancellation varies a step size of an adaptive filter in an acoustic echo canceller. Far-end data is received and echo estimate data is calculated using the received far-end data. Microphone data is received and error data is calculated using the received microphone data and the echo estimate data. A first average of the microphone data and a second average of the error data are computed over a predefined number of samples. An echo leakage is estimated using the first average and the second average wherein the echo leakage indicates an extent to which the far-end data is present in the error data, and the step size of the adaptive filter is varied based on the echo leakage and a maximum allowed step size.