A new hybrid approach to model high Reynolds number wall-bounded turbulent flows is developed based on coupling the two-level simulation (TLS) approach in the inner region with conventional large eddy simulation (LES) away from the wall. This new approach is significantly different from previous near-wall approaches for LES. In this hybrid TLS-LES approach, a very fine small-scale (SS) mesh is embedded inside the coarse LES mesh in the near-wall region. The SS equations capture fine-scale temporal and spatial variations in all three cartesian directions for all three velocity components near the wall. The TLS-LES equations are derived based on defining a new scale separation operator. The TLS-LES equations in the transition region are obtained by blending the TLS large-scale and LES equations. A new incompressible parallel flow solver is developed that accurately and reliably predicts turbulent flows using TLS-LES. The solver uses a primitive variable formulation based on an artificial compressibility approach and a dual time stepping method. The advective terms are discretized using fourth-order energy conservative finite differences. The SS equations are also integrated in parallel, which reduces the overall cost of the TLS-LES approach. The TLS-LES approach is validated and investigated for canonical channel flows, channel flow with adverse pressure gradient and asymmetric plane diffuser flow. The results suggest that the TLS-LES approach yields very reasonable predictions of most of the crucial flow features in spite of using relatively coarse grids.