This paper proposes an efficient lossless coding scheme for tree structured vector quantization (TSVQ) system which efficiently exploits inter-block correlation. The TSVQ index of the current block is adaptively arithmeticencoded depending on the indices of the previous blocks. This paper also presents a reductio method, which effectively resolve the memory problem which usually arises in many conditional entropy coding schemes. Simulation results show that the proposed scheme provides remarkable bitrate reduction by effectively exploiting not only linear but also non-linear inter-block correlation.