Lens Vignetting is a common distortion in imaging systems where the intensity of the image decreases gradually away from the image center. Incorrect compensation of this luminance degradation often results in a more disturbing artifact called color shading, where the resulting image is left with shades of different colors. This paper presents a novel adaptive technique to compensate for lens Vignetting, while preserving color saturation and eliminating the need for per-unit calibration. As a consequence, the performance of automatic white balance algorithms have also been improved. The proposed algorithm is lightweight and realizable on FPGA architecture for real time Vignetting correction. The experimental results indicate a significant improvement in the quality of the corrected images. It is expected that the proposed algorithm will be implemented on mobile Image Signal Processors (ISPs) in the near future.