A system and method for reducing the update package size used to convert an original image into a new image based on the differences between the two images. From comparison of original and new images, an update package is generated which includes ADD and COPY operations. This design introduces a RELOCATE operation. The update encoder attempts to re-express submitted COPY operations with one or more RELOCATE operations whose total length exceeds that of the original COPY. If this is the case, the RELOCATE operation(s) have progressed further through the images than the original COPY operation, thus producing a smaller update package. Each individual RELOCATE operation includes a number of instructions and a number of data items to be relocated.