Steganography is an ability of concealing information inside the cover in such a way it looks like simple cover. The goal is data hiding without much deteriorating the quality of the picture under consideration and successfully retrieve the data when needed. This approach focuses first on encrypting the secret data and then hiding the existence of the cipher so that any attacker would never know that a secret message is being passed over the insecure channel. This hiding is done using steganographic technique using image as a cover media. In this method, secret data is initially encrypted using Advance Encryption Standard (AES) and steganography scheme is used for hiding the cipher text into a grey cover image. The encryption key is sent securely through the exposed insecure channel using Diffie-Hellman Key Exchange Protocol. On reception of the stego-image, it undergoes extraction process. The extraction model is actually the reverse of the embedding model. The stego-image is resulable.