diff --git a/core/address.go b/core/address.go
index 19494a27a..6c72cb8cc 100644
--- a/core/address.go
+++ b/core/address.go
@@ -2,6 +2,8 @@ package core
 
 import (
 	"bytes"
+	"encoding/binary"
+	"github.com/ElrondNetwork/elrond-go-core/hashing/keccak"
 )
 
 // SystemAccountAddress is the hard-coded address in which we save global settings on all shards
@@ -85,3 +87,46 @@ func IsSmartContractOnMetachain(identifier []byte, rcvAddress []byte) bool {
 		make([]byte, numInitCharactersForOnMetachainSC))
 	return isOnMetaChainSCAddress
 }
+
+// NewAddress creates a new smart contract address from the creators address and nonce
+// The address is created by applied keccak256 on the appended value off creator address and nonce
+// Prefix mask is applied for first 8 bytes 0, and for bytes 9-10 - VM type
+// Suffix mask is applied - last 2 bytes are for the shard ID - mask is applied as suffix mask
+func NewAddress(creatorAddress []byte, addressLength int, creatorNonce uint64, vmType []byte) ([]byte, error) {
+	if len(creatorAddress) != addressLength {
+		return nil, ErrAddressLengthNotCorrect
+	}
+
+	if len(vmType) != VMTypeLen {
+		return nil, ErrVMTypeLengthIsNotCorrect
+	}
+
+	base := hashFromAddressAndNonce(creatorAddress, creatorNonce)
+	prefixMask := createPrefixMask(vmType)
+	suffixMask := createSuffixMask(creatorAddress)
+
+	copy(base[:NumInitCharactersForScAddress], prefixMask)
+	copy(base[len(base)-ShardIdentiferLen:], suffixMask)
+
+	return base, nil
+}
+
+func hashFromAddressAndNonce(creatorAddress []byte, creatorNonce uint64) []byte {
+	buffNonce := make([]byte, 8)
+	binary.LittleEndian.PutUint64(buffNonce, creatorNonce)
+	adrAndNonce := append(creatorAddress, buffNonce...)
+	scAddress := keccak.NewKeccak().Compute(string(adrAndNonce))
+
+	return scAddress
+}
+
+func createPrefixMask(vmType []byte) []byte {
+	prefixMask := make([]byte, NumInitCharactersForScAddress-VMTypeLen)
+	prefixMask = append(prefixMask, vmType...)
+
+	return prefixMask
+}
+
+func createSuffixMask(creatorAddress []byte) []byte {
+	return creatorAddress[len(creatorAddress)-2:]
+}
diff --git a/core/errors.go b/core/errors.go
index b11bc7f1e..4473c5dea 100644
--- a/core/errors.go
+++ b/core/errors.go
@@ -106,3 +106,9 @@ var ErrNilLogger = errors.New("nil logger")
 
 // ErrNilGoRoutineProcessor signals that a nil go routine processor has been provided
 var ErrNilGoRoutineProcessor = errors.New("nil go routine processor")
+
+// ErrAddressLengthNotCorrect signals that an account does not have the correct address
+var ErrAddressLengthNotCorrect = errors.New("address length is not correct")
+
+// ErrVMTypeLengthIsNotCorrect signals that the vm type length is not correct
+var ErrVMTypeLengthIsNotCorrect = errors.New("vm type length is not correct")