diff --git a/lib_com/options.h b/lib_com/options.h
index 31ece548c65344582f04e83e319a50f6ef84fa06..3c714b64e0669a84329647c9b2e1948fe6f8783d 100755
--- a/lib_com/options.h
+++ b/lib_com/options.h
@@ -201,6 +201,8 @@
 #define FIX_487_LOWRATE_SBA_TUNING_FIX                  /* Dlb: TUning fix for low bitrate cases to match theoretical longest SPAR MD bitstream */
 #define FIX_490_MASA_2TC_LBR_DTX                        /* Nokia: Fixes issue 490 by correcting condition. */
 
+#define FIX_163_SBA_TD_DECORR_OPT                       /* Dlb : Issue 163 : TD decorr state optimization in SBA for certain output formats */
+
 #define FIX_HBR_MASAMETA                                /* Nokia: Fixes to HBR MASA metadata at 384 and 512 kbps. Addresses issues 438 and 477 as well. */
 #define FIX_482_DUMMYDEC_INIT                           /* Nokia: fix issue #428: missing inits for dummyDec in IVAS_rend */
 #define FIX_468_16KHZ_PUPMIX                            /* Dlb: Fix issue 468 for Param Upmix at 16kHz sampling rate */
diff --git a/lib_dec/ivas_sba_dec.c b/lib_dec/ivas_sba_dec.c
index 9918a80b8291e964bfa7809b095dd02558b3e332..dd7174eae04d07205f89132babdab6b69c5be182 100755
--- a/lib_dec/ivas_sba_dec.c
+++ b/lib_dec/ivas_sba_dec.c
@@ -460,7 +460,14 @@ ivas_error ivas_sba_dec_digest_tc(
         while ( nSamplesLeftForTD )
         {
             int16_t nSamplesToDecorr = min( nSamplesLeftForTD, default_frame );
-            ivas_td_decorr_process( st_ivas->hDiracDecBin->hTdDecorr, p_tc, decorr_signal, nSamplesToDecorr );
+#ifdef FIX_163_SBA_TD_DECORR_OPT
+            if ( st_ivas->hDiracDecBin->hTdDecorr )
+            {
+#endif
+                ivas_td_decorr_process( st_ivas->hDiracDecBin->hTdDecorr, p_tc, decorr_signal, nSamplesToDecorr );
+#ifdef FIX_163_SBA_TD_DECORR_OPT
+            }
+#endif
             for ( ch_idx = 0; ch_idx < BINAURAL_CHANNELS; ch_idx++ )
             {
                 decorr_signal[ch_idx] += nSamplesToDecorr;
diff --git a/lib_dec/ivas_spar_decoder.c b/lib_dec/ivas_spar_decoder.c
index 7609099b5f5862091f692fbf2a214087afe6c74a..a2cdfe1562a92d543332a6bc2953830e10bdf751 100755
--- a/lib_dec/ivas_spar_decoder.c
+++ b/lib_dec/ivas_spar_decoder.c
@@ -101,10 +101,21 @@ ivas_error ivas_spar_dec_open(
     }
 
     /* TD decorr. */
-    if ( ( error = ivas_td_decorr_dec_open( &hSpar->hTdDecorr, output_Fs, num_decor_chs + 1, 1 ) ) != IVAS_ERR_OK )
+#ifdef FIX_163_SBA_TD_DECORR_OPT
+    if ( ( st_ivas->ivas_format == SBA_FORMAT ) && ( ( st_ivas->hDecoderConfig->output_config == AUDIO_CONFIG_MONO || st_ivas->hDecoderConfig->output_config == AUDIO_CONFIG_STEREO ) || ( st_ivas->hDecoderConfig->ivas_total_brate >= IVAS_256k && st_ivas->hDecoderConfig->output_config == AUDIO_CONFIG_FOA ) ) )
     {
-        return error;
+        hSpar->hTdDecorr = NULL;
+    }
+    else
+    {
+#endif
+        if ( ( error = ivas_td_decorr_dec_open( &hSpar->hTdDecorr, output_Fs, num_decor_chs + 1, 1 ) ) != IVAS_ERR_OK )
+        {
+            return error;
+        }
+#ifdef FIX_163_SBA_TD_DECORR_OPT
     }
+#endif
 
     /* MD handle */
     if ( ( error = ivas_spar_md_dec_open( &hSpar->hMdDec, st_ivas->hDecoderConfig, num_channels_internal, sba_order_internal, st_ivas->sid_format ) ) != IVAS_ERR_OK )
@@ -731,8 +742,15 @@ static void ivas_spar_dec_MD(
             if ( hSpar->hMdDec->table_idx != table_idx )
             {
                 hSpar->hMdDec->table_idx = table_idx;
-                hSpar->hTdDecorr->ducking_flag = ivas_spar_br_table_consts[table_idx].td_ducking;
+#ifdef FIX_163_SBA_TD_DECORR_OPT
+                if ( hSpar->hTdDecorr )
+                {
+#endif
+                    hSpar->hTdDecorr->ducking_flag = ivas_spar_br_table_consts[table_idx].td_ducking;
+#ifdef FIX_163_SBA_TD_DECORR_OPT
+                }
 
+#endif
                 ivas_spar_md_dec_init( hSpar->hMdDec, hDecoderConfig, num_channels, sba_order );
             }
         }
@@ -1231,25 +1249,32 @@ void ivas_spar_dec_digest_tc(
         {
             int16_t nSamplesToDecorr = min( nSamplesLeftForTD, default_frame );
 
-            ivas_td_decorr_process( hSpar->hTdDecorr, p_tc, pPcm_tmp, nSamplesToDecorr );
-            if ( hSpar->hTdDecorr->num_apd_outputs >= ( nchan_internal - nchan_transport ) )
-            {
-                for ( ch = 0; ch < nchan_internal - nchan_transport; ch++ )
-                {
-                    mvr2r( pPcm_tmp[hSpar->hTdDecorr->num_apd_outputs - 1 - ch], p_tc[nchan_internal - 1 - ch], nSamplesToDecorr );
-                }
-            }
-            else
+#ifdef FIX_163_SBA_TD_DECORR_OPT
+            if ( hSpar->hTdDecorr )
             {
-                for ( ch = 0; ch < nchan_internal - nchan_transport; ch++ )
+#endif
+                ivas_td_decorr_process( hSpar->hTdDecorr, p_tc, pPcm_tmp, nSamplesToDecorr );
+                if ( hSpar->hTdDecorr->num_apd_outputs >= ( nchan_internal - nchan_transport ) )
                 {
-                    set_zero( p_tc[nchan_internal - 1 - ch], nSamplesToDecorr );
+                    for ( ch = 0; ch < nchan_internal - nchan_transport; ch++ )
+                    {
+                        mvr2r( pPcm_tmp[hSpar->hTdDecorr->num_apd_outputs - 1 - ch], p_tc[nchan_internal - 1 - ch], nSamplesToDecorr );
+                    }
                 }
-                for ( ch = 0; ch < hSpar->hTdDecorr->num_apd_outputs; ch++ )
+                else
                 {
-                    mvr2r( pPcm_tmp[hSpar->hTdDecorr->num_apd_outputs - 1 - ch], p_tc[nchan_internal - 1 - ch], nSamplesToDecorr );
+                    for ( ch = 0; ch < nchan_internal - nchan_transport; ch++ )
+                    {
+                        set_zero( p_tc[nchan_internal - 1 - ch], nSamplesToDecorr );
+                    }
+                    for ( ch = 0; ch < hSpar->hTdDecorr->num_apd_outputs; ch++ )
+                    {
+                        mvr2r( pPcm_tmp[hSpar->hTdDecorr->num_apd_outputs - 1 - ch], p_tc[nchan_internal - 1 - ch], nSamplesToDecorr );
+                    }
                 }
+#ifdef FIX_163_SBA_TD_DECORR_OPT
             }
+#endif
             for ( ch = 0; ch < nchan_internal; ch++ )
             {
                 p_tc[ch] += nSamplesToDecorr;
@@ -1312,25 +1337,32 @@ void ivas_spar_dec_upmixer(
 
     if ( hSpar->hMdDec->td_decorr_flag )
     {
-        ivas_td_decorr_process( hSpar->hTdDecorr, st_ivas->hTcBuffer->tc, pPcm_tmp, output_frame );
-        if ( hSpar->hTdDecorr->num_apd_outputs >= ( nchan_internal - nchan_transport ) )
-        {
-            for ( i = 0; i < nchan_internal - nchan_transport; i++ )
-            {
-                mvr2r( pPcm_tmp[hSpar->hTdDecorr->num_apd_outputs - 1 - i], st_ivas->hTcBuffer->tc[nchan_internal - 1 - i], output_frame );
-            }
-        }
-        else
+#ifdef FIX_163_SBA_TD_DECORR_OPT
+        if ( hSpar->hTdDecorr )
         {
-            for ( i = 0; i < nchan_internal - nchan_transport; i++ )
+#endif
+            ivas_td_decorr_process( hSpar->hTdDecorr, st_ivas->hTcBuffer->tc, pPcm_tmp, output_frame );
+            if ( hSpar->hTdDecorr->num_apd_outputs >= ( nchan_internal - nchan_transport ) )
             {
-                set_zero( st_ivas->hTcBuffer->tc[nchan_internal - 1 - i], output_frame );
+                for ( i = 0; i < nchan_internal - nchan_transport; i++ )
+                {
+                    mvr2r( pPcm_tmp[hSpar->hTdDecorr->num_apd_outputs - 1 - i], st_ivas->hTcBuffer->tc[nchan_internal - 1 - i], output_frame );
+                }
             }
-            for ( i = 0; i < hSpar->hTdDecorr->num_apd_outputs; i++ )
+            else
             {
-                mvr2r( pPcm_tmp[hSpar->hTdDecorr->num_apd_outputs - 1 - i], st_ivas->hTcBuffer->tc[nchan_internal - 1 - i], output_frame );
+                for ( i = 0; i < nchan_internal - nchan_transport; i++ )
+                {
+                    set_zero( st_ivas->hTcBuffer->tc[nchan_internal - 1 - i], output_frame );
+                }
+                for ( i = 0; i < hSpar->hTdDecorr->num_apd_outputs; i++ )
+                {
+                    mvr2r( pPcm_tmp[hSpar->hTdDecorr->num_apd_outputs - 1 - i], st_ivas->hTcBuffer->tc[nchan_internal - 1 - i], output_frame );
+                }
             }
+#ifdef FIX_163_SBA_TD_DECORR_OPT
         }
+#endif
     }
 
     ivas_spar_dec_set_render_params( st_ivas, DEFAULT_JBM_CLDFB_TIMESLOTS );
diff --git a/lib_dec/ivas_spar_md_dec.c b/lib_dec/ivas_spar_md_dec.c
old mode 100644
new mode 100755