We present a novel unstructured coarse grid generation technique based on vorticity for upscaling two-phase flow in permeable media. In the technique, the fineness of the gridblocks throughout the domain is determined by vorticity distribution such that where the larger is the vorticity at a region, the finer are the gridblocks at that region. Vorticity is obtained from single-phase flow on original fine grid, and is utilized to generate a background grid which stores spacing parameter, and is used to steer generation of triangular and finally Voronoi grids. This technique is applied to two channelized and heterogeneous models and two-phase flow simulations are performed on the generated coarse grids and, the results are compared with the ones of fine scale grid and uniformly gridded coarse models. The results show a close match of unstructured coarse grid flow results with those of fine grid, and substantial accuracy compared to uniformly gridded coarse grid model.