In this thesis we address the problem of designing codes for specific applications. To do so we make use of the relationship between clusters and codes. Designing a block code over any finite dimensional space may be thought of as forming the corresponding number of clusters over the particular dimensional space. In literature we have a number of algorithms available for clustering. We have examined the performance of a number of such algorithms, such as Linde-Buzo-Gray, Simulated Annealing, Simulated Annealing with Linde-Buzo-Gray, Deterministic Annealing, etc, for design of codes. But all these algorithms make use of the Eucledian squared error distance measure for clustering. This distance measure does not match with the distance measure of interest in the error correcting scenario, namely, Hamming distance. Consequently we have developed an algorithm that can be used for clustering with Hamming distance as the distance measure. Also, it has been observed that stochastic algorithms, such as Simulated Annealing fail to produce optimum codes due to very slow convergence near the end. As a remedy, we have proposed a modification based on the code structure, for such algorithms for code design which makes it possible to converge to the optimum codes.