The present invention relates to a method and system for multi-rate lattice vector quantization of a source vector x representing a frame from a source signal to be used, for example, in digital transmission and storage systems. The multi-rate lattice quantization encoding method comprises the steps of associating to x a lattice point y in a unbounded lattice Lambda; verifying if y is included in a base codebook C derived from the lattice Lambda; if it is the case then indexing y in C so as to yield quantization indices if not then extending the base codebook using, for example a Voronoi based extension method, yielding an extended codebook; associating to y a codevector c from the extended codebook, and indexing y in the extended codebook C. The extension technique allows to obtain higher bit rate codebooks from the base codebooks compared to quantization method and system from the prior art.