The use of underwater systems has grown significantly, and they can be used both for military and civilian purposes. Many of their parts are replaceable. An underwater vehicle can be equipped with different devices depending on the taskit should carry out. This can make the vehicle unbalanced, which means that the demand for balancing systems will increase in line with the increasing use of underwater systems. The goal of the thesis is to deliver a method for balancing based on parameters estimated both in static and dynamic operation. The parameters define a nonlinear physical model that can describe the underwater vehicle in different environments and conditions. The main idea in the proposed method for parameter estimation based on static operation data is to solve equilibrium equations when the on-board control system is used to maintain two different orientations. The balancing can then be done by solving an optimisation problem that gives information about where additional weights or float material should be installed. The static parameter estimation has been evaluated successfully in simulations together with three ways of solving the balancing problem. The dynamic parameter estimation has also been evaluated in simulations. In this case, the estimated parameters seem to have the same sign as the true ones but it seems difficult to obtain accurate estimates of some of the parameters. However, the total dynamic model was good except the prediction of the vertical movements. In particular, the model could explain the rotations of the vehicle well. The reason for the worse performance for the vertical movements might be some difficulties when generating suitable excitation signals. The work done by Feras Faez Elias in connection to this master thesis made a contribution to a patent application that Saab AB has filed where Feras Faez Elias was one of the inventors.