Since the last few decades, image mosaicing in real time applications has been a challenging field for image processing experts. It has wide applications in the field of video conferencing, 3D image reconstruction, satellite imaging and several medical as well as computer vision fields. It can also be used for mosaic-based localization, motion detection & tracking, augmented reality, resolution enhancement, generating large FOV etc. In this research work, feature based image mosaicing technique using image fusion have been proposed. The image mosaicing algorithms can be categorized into two broad horizons. The first is the direct method and the second one is based on image features. The direct methods need an ambient initialization whereas, Feature based methods does not require initialization during registration. The feature-based techniques are primarily followed by the four steps: feature detection, feature matching, transformation model estimation, image resampling and transformation. SIFT and SURF are such algorithms which are based on the feature detection for the accomplishment of image mosaicing, but both the algorithms has their own limitations as well as advantages according to the applications concerned. The proposed method employs this two feature based image mosaicing techniques to generate an output image that works out the limitations of the both in terms of image quality The developed robust algorithm takes care of the combined effect of rotation, illumination, noise variation and other minor variation. Initially, the input images are stitched together using the popular stitching algorithms i.e. Scale Invariant Feature Transform (SIFT) and Speeded-Up Robust Features (SURF). To extract the best features from the stitching results, the blending process is done by means of Discrete Wavelet Transform (DWT) using the maximum selection rule for both approximate as well as detail-components.