According to one embodiment, a prediction unit generates a prediction block to be used for prediction of a coding target block, based on at least one reference block adjacent to the coding target block in the image. Each number of pixels in the coding target block and the prediction block is a power of two. A calculation unit calculates a residual block having residual pixel values between the coding target block and the prediction block. A decision unit decides whether to code the residual block, based on pixel values of at least one of the coding target block, the reference block and the prediction block. A coding unit codes the residual block by variable length coding when the residual block is decided to be coded, and codes a skip flag representing the residual block not being coded when the residual block is not decided to be coded.