An image denoising method in moment domain has been proposed. The denoising involves the development and evaluation based on the modified nonlocal means (NLM) algorithm. It uses the similarity of the neighborhood, evaluated using Krawtchouk moments. The results of the proposed denoising method have been validated using peak signal-to-noise ratio (PSNR), a well-known quality measure such as structural similarity (SSIM) index and blind/referenceless image spatial quality evaluator (BRISQUE). The denoising algorithm has been evaluated for synthetic and real clinical images contaminated by Gaussian, Poisson, and Rician noise. The algorithm performs well compared to the Zernike based denoising as indicated by the PSNR, SSIM, and BRISQUE scores of the denoised images with an improvement of 3.1 dB, 0.1285, and 4.23, respectively. Further, comparative analysis of the proposed work with the existing techniques has also been performed. It has been observed that the results are competitive in terms of PSNR, SSIM, and BRISQUE scores when evaluated for varying levels of noise.