This paper provides a systematic method for model bank selection in multi-linear model analysis for nonlinear systems by presenting a new algorithm which incorporates a nonlinearity measure and a modified gap based metric. This algorithm is developed for off-line use, but can be implemented for on-line usage. Initially, the nonlinearity measure analysis based on the higher order statistic (HOS) and the linear cross correlation methods are used for decomposing the total operating space into several regions with linear models. The resulting linear models are then used to construct the primary model bank. In order to avoid unnecessary linear local models in the primary model bank, a gap based metric is introduced and applied in order to merge similar linear local models. In order to illustrate the usefulness of the proposed algorithm, two simulation examples are presented: a pH neutralization plant and a continuous stirred tank reactor (CSTR). (C) 2012 Elsevier Ltd. All rights reserved.