In this paper, we give the necessary and sufficient conditions that guarantee the existence of a diffeomorphism which allows one to transform a multi-output nonlinear dynamical system into a normal observable canonical form. In particular, we propose an algorithm that permits one to derive such diffeomorphism. The main feature of the canonical form is that it is obtained by allowing a diffeomorphism on the outputs and it also allows one to design an observer with linear error dynamics. We first consider multi-output nonlinear dynamical system without inputs. We then extend the results obtained to multi-output nonlinear dynamical system with inputs. (C) 2009 Elsevier Ltd. All rights reserved.